India, France Inter-Governmental Agreement on Rafale Purchase Likely Next Week

France and India are expected to sign an inter-governmental agreement on the purchase of the Dassault Rafale fighter aircraft next week.

French Defense Minister Jean-Yves Le Drian is expected to arrive in Delhi August 31 and will hold talks with his Indian counterpart Manohar Parrikar before signing the inter-governmental agreement on Tuesday, various media reported.

The inter-governmental agreement does not mean that the deal is through. The two sides still have to conclude a commercial contract for the deal to get underway.

Defenseworld.net reported last week that that the French Defence Minister was expected in Delhi in the week starting August 31 to sign an agreement on the Rafale deal.

In April, Indian Prime Minister Narendra Modi and French President Francois Hollande agreed to fast-track the Rafale procurement by buying  36 French-built Rafale fighters with no manufacturing in India.

Unnamed sources quoted in the Indian media said that talks were still on with the negotiating committee considering the 50 per cent offset requirements, as well as the arms and equipment the fighters will be fitted with.

The unit price of the 36 Rafale aircraft was 25 percent higher than the $200-million price tag offered to the Indian prime minister during his April visit to France, the Times of India reported yesterday.

Sources quoted in the French media reported that higher price was because the Indian Air Force (IAF) was asking for a different set of armaments than what was proposed under the earlier RFP route and that Indian wanted offsets which would push up the final cost.