Dassault Close To A Contract With India's HAL $11 Billion MMRCA Contract: CEO Eric Trappier

Dassault may have reached a deal with India’s state-owned Hindustan Aeronautics Limited over the contract to supply 126 Rafale jets.

The aircraft-maker’s CEO Eric Trappier today hinted that its problems regarding manufacture of the Rafale jets in India may have ended.

Negotiations between India and France have been dragging for over two years since the French company was declared the finalist in the $11 billion program to purchase the Rafale fighter planes.

Dassault has had reservations over HAL's capacity to absorb complex technology and wanted to rope in other private sector companies for manufacturing the jets in India. However, New Delhi has always maintained that HAL would remain a lead player.

In a statement about the company’s annual report, Trappier said, "We have effectively a contract with HAL,” and added, “We have taken a step to a new level" with regards to finalizing the contract with India.

Offset hurdles have been the major road block to signing the deal. In 2013, Dassault wrote to the Indian MoD demanding it be given the overall responsibility of the project and clearly identify HALs role. 

Despite the ministry asserting that HAL would act as the project’s ‘lead-integrator’ as per the terms of the RFI issued in 2007, Dassault in its letter insisted that it be given the freedom to decide on the quantum of work to be shared between companies.

According to the original terms, 18 of the 126 planes are to be purchased directly from Dassault, while HAL will manufacture the other 108 under a licence at an upcoming facility in Bangalore. 

Meanwhile, Dassault Aviation reported on Thursday a profit slump for 2013. Net profit for the year fell 8.5 percent to 459.45 million euros ($641 million), but total orders intake rose 25 percent to 4.16 billion.

Defence orders made up just 1.26 billion euros in 2013, up from 793 million euros in 2012.