High-level Indian and French defence negotiators have failed to arrive at a consensus on the pricing of the 36 Rafale jets that India is supposed to purchase from Dassault Aviation, with the French manufacturer refusing to quote anything lower than Rs 90,000 crore for the aircraft. When the Price Negotiation Committee (PNC) met at the North Block in the national capital on Wednesday afternoon, the Indian side was not willing to go beyond Rs 65,000 crore to buy the 36 jets in fly-away condition, said sources in the Ministry of Defence (MoD). The French manufacturer, Dassault Aviation, on the other hand, asked for Rs 90,000 crore. Ministry sources said that Dassault is not willing to bring the price down, but has added some incentives in terms of support and spares in its new proposal.
A top source in the MoD, who is a part of the PNC and is, thus, privy to the development, told this newspaper, “The Defence Minister (Manohar Parrikar) is playing hardball. Obviously, the French have quoted an obscene amount of money for these planes. We are clear that we will not be bullied into buying overpriced jets. We are the ones who are buying. We will decide what to buy and how much we want to pay. They want around 12 billion euros for the jets. We have told them that we will not give you more than 8 billion euros. Negotiations are on, but we have not been able to come to a compromise.”
The source also added, “The minister is not willing to pay over the top. A strong lobby is pushing for the deal to be signed soon. They are trying to create some urgency in government circles and in the public. They are hoping that this will put pressure on the hasty signing of the deal, without much bargaining. The minister has made it clear to the acquisition committee that if the French do not give in to our price demands and stay adamant then we may look into other options.”
A compromise could not be reached on the price during the visit of French President Francoise Hollande in January. “That is why the deal was stalled,” said the MoD source.
Meanwhile, Eric Trappier, chairman of Dassault Aviation said that they were in the “final phase” of the negotiation and were working towards setting up a “real partnership” with Indian industry, instead of the usual offset that requires investments in unrelated sectors.
The Rafale is a Medium Multi-Role Combat Aircraft (MMRCA). According to the proposed deal, a total of 36 nuclear-capable Rafale jets will be delivered to India in fly-away condition. These jets will be equipped with high-end weapons systems, array radars, beyond-visual-range missiles and defensive weapons systems, among other features. The deal also includes a long-term support and maintenance package with Dassault, with provisions of upgrade.
The Indo-French High Committee meeting, which was scheduled for 9 and 10 March was chaired by Defence Secretary G. Mohan Kumar. Defence industry, research, technology transfer and procurement were the key areas of focus of the meeting. The parties discussed the status of several defence deals between the two countries, including the Short Range Surface to Air Missile joint development deal. “During the meeting, the French delegation gave an amended proposal to the previous one. We are assessing it and will get back to them shortly,” said the source.