Ahead of Hollande’s visit, India, France trying to clinch Rafale deal

The coveted Rafale fighter jet deal between India and France may be reaching its closure, ahead of French President Francois Hollande’s visit to New Delhi. India and France are close to a deal to buy 36 combat planes from Dassault, India’s Defence Minister Manohar Parrikar said. After many rounds of negotiations over price and other terms of the sale, the deal could be reached by the end of January.

Mr Francois Hollande will be visiting India as the guest of honour for the Republic Day parade, a gesture reserved for close friends of India. India and France are expected to conclude the deal for the Rafale fighter jets either just before Mr Hollande’s arrival or during the visit.

“It’s closer to completion,” Mr Parrikar said, without getting into any details. France had agreed to invest in 50 percent of the deal value in ‘Make in India’ projects. French aviation giant Dassault is expected to pump in USD 4.5 billion is estimated to come into India into the deal.

Indian Air Force has been looking to replace its Soviet-era warplanes. The latest acquisition will help the forces counter India’s two-front threat from China and Pakistan. 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.

As per the new deal, the jets will be brought off the shelf. “The procedure is going on,” Mr Parrikar said. India hopes that the bulk of the air force fleet will be made up by an indigenous fighter aircraft that has been in the making for many years now.

Make in India

With the completion of the deal and France setting up a manufacturing unit in India, the government’s flagship ‘Make in India’ is all set to get the required thrust. One of the major ‘Make in India’ investments is likely to be in the manufacturing of components of the French Falcon executive jets. This could generate more employment in India, a major priority for the Modi government. Mr Modi’s promise of growth with jobs would get the required momentum once the deal concludes.

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