Narendra Modi, Francois Hollande to discuss defence and business cooperation. Rafale deal may see some progress

QUICK PILL

• As French President Francois Hollande visited India on the eve of Republic day parade, experts are placing bets on the fruition of Rafale deal.
• The deal has been stuck for nearly four years over pricing and delivery differences.
• India needs to add Rafale jets in its fleets to modernise its military weaponry to counter cross-border skirmishes and also the very real ISIS threat.
• But Modi and Hollande seem positive about clearing bottlenecks and getting the deal going successfully.

As French President Francois Hollande announced a slew of areas of cooperation between India and France during his India visit on the eve of Republic Day, experts have focused on developments that can take place with regards to the agreement for the purchase of 36 Rafale fighter jets.

This deal that was kick-started during UPA regime has seen much progress after the Modi government came to power in 2014, but differences in pricing and manufacturing have led to much deliberations between India and France in successful fruition of the deal.

Here's what Hollande said about the deal

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French President Francois Hollande said in Chandigarh on Sunday that one of the main aims of his visit was to implement the decisions taken during Prime Minister Narendra Modi's visit to France.

While the final deal seems a bit unlikely owing to differences over pricing and agreements with HAL and Indian government, the conclusion of the government-to-government agreement seems to be nearing. In an interview to PTI, he said:

"The Rafale is a major project for India and France. It will pave the way for an unprecedented industrial and technological cooperation, including 'Make in India', for the next 40 years. Agreeing on the technicalities of this arrangement obviously takes time, but we are on the right track".

Negotiations over pricing

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According to reports by The Hindu, the government is trying to reduce the price per aircraft by 20 per cent, which is now over Euro 100 million or Rs 800 crore including the the weapons package. If the deal goes through, India can have upgraded high-tech weaponry in its fleet for aerial missions.

What Modi said in 2015

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Prime Minister Narendra Modi had, during his visit to Paris last April, announced the decision on direct purchase of 36 Rafale fighter jets. He had cited the critical operational necessity of the Indian Air Force.

What followed was a set of negotiations over pricing, manufacturing capabilities and India's wish to set up assembly units in India in association with HAL, which the French team did not agree to.

Teams from both countries have been holding talks over the last few days to finalise the draft of the government-to-government agreement, which may lead to the commercial deal. However, the final deal has been delayed by differences over pricing and delivery schedule.

The developments so far

Indian and French negotiators on Friday tried debating the price of the combat planes that are key to India's plans to modernize its military and keep up with neighbours Pakistan and China with the imminent ISIS threat looming.

For nearly four years, the Rafale deal has been stuck in extensive negotiations. The original proposal for 126 fighter jets is worth at least 12 million dollars.

According to reports, the original plan was for India to buy 18 off-the-shelf jets from France's Dassault Aviation, with nearly 100 others being assembled at home by the state-run Hindustan Aeronautics Limited or HAL in Bengaluru. But Dassault has been reluctant to provide guarantees for the aircraft that are produced in India.

Experts suggest that India is also aware that making the bulk of the jets in India will cause massive delays since the state-run HAL will need time to implement the new technology and meet the exacting standards of the French before it is delivered to the Indian Air Force.

To speed up the purchase and give the air force the jets that it desperately needs to upgrade its ageing fleet, India is looking at buying about 60 ready-to-fly planes.

Modi-Hollande to hold talks

President Hollande and Narendra Modi are expected to sit side by side to watch Tuesday's Republic Day parade, as reported by Catch in November and confirmed by MEA in December. French soldiers will march down Rajpath along with Indian troops, a first for any foreign army.

The two leaders are also expected to discuss deals on more nuclear reactors, smart cities, space cooperation, business and energy.