Advance Guarantee Waiver Could Save $151.7 million For India In Rafale Deal

India has sought a waiver of $151.7 million advance guarantee from France in Rafael deal.

India wants waiver from a key provision, according to which it has to pay the amount as advance guarantee. In case, France agrees to the demand, it benefits India in saving more than $151.7 million, The Hindustan Times reported Saturday.

The deal for 36 Rafale warplanes is expected to be worth around $ 8.2 billion. The deal was signed as India has asserted strongly on getting rid of the advance guarantee clause as it was a government-to-government sale.

The sources said defence minister Manohar Parrikar has conveyed the India's stance on the issue to French authorities through diplomatic channels on Thursday. According to the souces, all other issues have been resolved.

Last week, Parrikar informed Lok Sabha that the team negotiating the deal to buy the French fighters, manufactured by Dassault Aviation, had submitted its final report to the government.

The deal could be sent to finance ministry in upcoming days, if France responds in favourable way. After clearance from finance ministry, it will move further for final approval to cabinet committee on security, which is headed by Prime minister.

The deal is important for the Indian Air Force as it is struggling due to reduction in the number of fighter fleet.

Currently Indian Airforce has 33 figher squadron and each consists of 18 fighter planes but actually it needs 45 combat units to counter a combined threat from China and Pakistan. The Indian Air Force has admitted that it is facing scarcity of warplanes to fight a two-front war.

Indian government’s actual plan was to purchase 126 fighters but the government cancelled the deal, chose to buy only 36. The recent deal was announced by Modi during a visit to Paris last year.