Closure In Sight For India's Rafale Aircraft Purchase?

A deal appears to  be sight for India’s purchase of 36 Dassault Rafale aircraft following a comment by the Indian defence minister that the deal “should be finalized soon.”

Defence minister Manohar Parrikar’s comments were reported in several Indian media who quizzed him regarding the deal during a maritime summit in Mumbai yesterday.

This is the first positive assertion about the deal by the minister in recent weeks. Earlier the minister had commented that India would do a deal if the price was right indicating that the asking price by the French was higher than what India expected.

Various reports said that the French government and Dassault has demanded around 9 billion euros while the Indian side was expecting the price to be brought down to about 7-8 billion euros. An industry source told defenseworld.net that the price differences between the two sides “was narrowing and a mid point would be reached soon.”

The French government-Dassault team had come back to the negotiation table a fortnight ago with a revised price quote comprising the aircraft, maintenance, training and support and offsets.

Meanwhile, the Hindustan Times newspaper reported that the initial price of 11.6 billion euros (Rs 85,000 crore) with 2015 as the base year was brought down by Dassault to 8 billion euros (Rs 65,000 crore), with 2011 as the base year for fixing the price for each aircraft manufactured. Sources said negotiations are underway between the countries and Dassault to come to a mutually-agreeable price.

The French media had earlier reported quoting Dassault chief, Eric Trappier that his company could consider a price lower than what was quoted to Egypt and Qatar as the Indian deal was “all cash” while the two earlier deals had elements of financing and deferred payments.