Rafale deal to be signed only after inter-governmental agreement: Hollande

Ending all speculation about the signing of the Rafale agreement during his visit, France’s President Francois Hollande’s has clarified that the deal was “progressing,” but it will be only signed after an inter-governmental pact between France and India.

“So here we will be crossing another step and which will go, we hope, towards India’s acquisition of 36 Rafale aircraft, because India needs it and France has demonstrated that they are the best aircraft in the world,” Mr Hollande said. The French aviation giant Dassault is expected to invest USD 4.5 billion in the deal.

The Indian Air Force has been looking to replace its Soviet-era warplanes. India had initially cleared the purchase of 126 Rafale planes at an estimated price of USD12 billion. However, in 2014 the number of planes was scaled back to 36 by the Modi government after the two sides could not agree on unit price and local assembly of the aircraft after labyrinthine negotiations.

The deal is also expected to give thrust to the ‘Make in India’ initiative. One of the major ‘Make in India’ investments is likely to be in the manufacturing of components of the French Falcon executive jets. On being asked whether the agreement would be signed during the ongoing visit, Mr Hollande said: “The contract itself can only be signed after the inter-governmental agreement. It’s the inter-governmental agreement – that is what our Indian friends desired – that will enable the commercial agreement. So, the inter-governmental agreement will be discussed here during the visit.” As per the new deal, the 26 fighter jets will be brought off the shelf.

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