Rafale deal inches along with tough talk on pricing

Contrary to speculation that India and France have reached an agreement for the direct purchase of 36 Rafale fighter jets, official sources said talks on pricing had reached a critical phase and were expected to be completed in a few months.

Sources said the differences over pricing had narrowed down considerably, and the talks were in the final phase.

While the French offer was about €11 billion, India said it would not go beyond €8 billion. Defence Minister Manohar Parrikar has clarified on various occasions that there will be no compromise on the price.

A senior diplomat refused to give a timeline for concluding the deal but expressed the hope that it would be done by June.

After some hard negotiations, the differences seem to have narrowed down considerably, with the French climbing down on their offer. The conclusion of the inter-governmental agreement will pave the way for signing of the final contract.

In January this year, both sides signed a Memorandum of Understanding for the purchase during the visit of French President Francois Hollande to India.

The development comes one year after the surprise announcement by Prime Minister Narendra Modi in Paris on the direct purchase of 36 fighter jets under a government-to-government agreement.

However, the talks to conclude the deal were gridlocked over offset requirements, customisations as sought by the Indian Air Force (IAF) and pricing.

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Source:Thehindu

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