Indo-French Draft Contract On Rafale Purchase Ready

A draft contract between India and France for the purchase of 36 Rafale fighter jet is ready, according to local media reports.

According to the draft contract, the first fighter jet must be supplied in the first three years after the deal has been finalized,  local media reported Sunday.

India is hopeful of negotiating a price cut of up to 25 per cent in the purchase costing about US $82 million each instead of US $115 million. Indian Air Force will receive all the 36 fighters in seven years after signing the deal.

India and France are likely to sign the deal for 36 Rafale fighter aircraft on the eve of French President François Hollande’s visit to India for the Republic Day celebrations.

The Indian MoD had earlier this month said that France had agreed to reinvest 50 per cent of the contract on the Rafale fighter in India.

A top Industry source, meanwhile, said that a 50 per cent offset on the contract is an overestimation. The 50 per cent figure was applicable when the contract was being negotiated for 126 aircraft. Now that the final figure is only for 36 aircrafts, the offset figure will naturally be less.

Dassault is in talks with various Indian corporates about being possible offsets partner at this stage. The offsets partner, out of the main contract, will only be decided upon after the final inter-governmental deal is concluded.