Rafale deal: French Defence Minister Jean Yves Le Drian to arrive in India

New Delhi: French Defence Minister Jean Yves Le Drian is set to arrive in New Delhi on 22 September along with CEOs of Dassault Aviation, Thales and MBDA to seal the 7.87 billion Euros deal for 36 Rafale fighter jets.

Defence sources said if all goes well, the Inter Governmental Agreement (IGA) will be signed on 23 September. Government sources said the cost, offsets and service details have been finalised and work is currently being done on the IGA.

Representational image. Reuters

Representational image. Reuters

A "working team" from France is already in town with their own translators are going through the contract, running into several thousand pages, with their Indian counterparts. The sources said that once the IGA is firmed up, the document will go to the Cabinet Committee on Security for final clearance.

The French Defence Minister will be arriving on the evening of September 22 along with CEOs of companies involved in the Rafale project, sources involved in the deal said. India has been able to save over Euro 590 million through tough price negotiations which began in January this year.

Though the deal could have been firmed up earlier, issues like pricing and offsets took time as India wanted a better contract. Following intervention by Prime Minister Narendra Modi late last year, France agreed for a 50 per cent offset clause.

This means creating business worth at least three billion Euros for Indian companies, both big and small, and generating hundreds of jobs in India through offsets. The delivery for the fighter aircraft is expected to begin in 2019, with an annual inflation capped at 3.5 percent.

The weapon systems, part of the deal, will also include the new-age beyond visual range missile 'Meteor', and Israeli helmet-mounted display. Last month, a report submitted by the team negotiating the Rafale deal with France was cleared by the Defence Ministry. The file was then sent to the Prime Minister's Office for review and clearance.

The work on the IGA started after that, sources said. During his visit to France in April last year, the Prime Minister had announced that India would purchase 36 Rafale jets in a government-to-government contract.

Soon after the announcement, the Defence Ministry had scrapped a separate process that was on to purchase 126 Rafale fighter planes, built by French defence giant Dassault Aviation.

Updated Date: Jan 06, 2017 18:45 PM

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