It’s going to be a big test for Indo-French relations as the Rafale fighter jet deal has reached the final clearance level after protracted negotiations. The price of the combat aircraft has come down to 7.25 billion and Paris is offering cutting-edge technology, including jet engine knowhow, to India.
Sources told ET the deal for 36 fighter aircraft could be cleared as early as the next meeting of the Cabinet Committee on Security (CCS), with the defence ministry all formalities and negotiations with the French side.
A decision on the deal is critical for France that has suffered a setback with the leak of sensitive documents of the Scorpene submarine project, currently being executed in Mumbai.
Sources said the issues raised by the PMO, after a scrutiny of documents, have been clarified by the defence ministry. “Unless there are any unforeseen complications, the jet fighter contract should happen soon. The price has been substantially lowered after several rounds of tough negotiations,” an official aware of the developments told ET.
As part of the deal, France will invest 50 per cent of the value of the deal in the domestic defence and aviation sectors as an offset clause. France has offered 16 critical technologies to India as part of the deal.
The French side will also assist Indian private industry in setting up a global supply chain as part of the offset plan. Among other projects, French firm Dassault is likely to set up a line in India with a private partner to manufacture major structural parts for its Falcon executive jet aircraft.