Government likely to pay Rs 58k cr for Rafale jets

DHNS

Parrikar says the deal is in the ’final stage’

New Delhi, 16 April 2016: The price negotiations on the much-awaited military deal to purchase 36 Rafale fighter jets from France, may have entered the last leg with both sides veering towards a price of about Rs 58,000 crore for the fleet.

 

After almost a year of negotiations, New Delhi and Paris seem to be closing the deal around a price of 7.8 billion Euro though there is no official confirmation on that. If everything goes as per the plan, the deal may be signed in May.

 

Sources in the defence ministry, however, pointed out price negotiations had not been concluded though substantial progress were made.

 

Defence Minister Manohar Parrikar stated several times in the recent weeks that Rafale deal was in the “final stage” and irritants like 50% offset have been ironed out. The French side is believed to have agreed to the offset conditions.

 

Parrikar claimed he was taking more time because he was a tough negotiator, who was taking time for a good bargain. The manufacturer Dassault Aviation initially claimed 11 billion Euro for the government-to-government deal that was announced by Prime Minister Narendra Modi when he visited Paris last year.

 

The first aircraft is likely to be delivered 18 months after signing the commercial agreement.

 

The negotiations gained pace since the visit of French President Francois Hollande in January. His predecessor Nicolas Sarkozy, who was in Delhi this week, stated that whichever political party come to power in France in next year’s presidential election would honour the Rafale deal. With depleting fighter strength, the IAF is looking at the Rafale deal to add some strength in its wings. Even though the initial requirement was 126 aircraft, the Air headquarters had pointed out to the government that at least 54 Rafale are needed due to depleting squadron strength.