After clearing defence acquisitions of over Rs 1 lakh crore, the much awaited multi-billion French Rafale combat aircraft deal is expected to be next on the agenda for the Narendra Modi Government on defence procurement.
According to a top official of the Ministry of Defence (MoD) privy to the development, over two years of negotiations between French firm Dassault and the Ministry is almost complete and a decision is likely to be taken soon, for which a voluminous draft agreement of over 15,000 pages between the Dassault and IAF has already been prepared.
“The contract negotiations committee has almost completed its task and would submit its report very soon. And we expect a final decision on the deal by the end of next month,” said a top official from the Ministry. A source said a decision is likely after Defence Secretary RK Mathur returns from the US. Meanwhile, French Ambassador S E M François Richier said here, “The negotiations are progressing well.” Recalling that there were statements made by Indian defence officials in the recent past about the progress and recent visit by the CEO of French Dassault Aviation SA, makers of Rafale, Richier added, “It is a signal that it is moving in the right direction.”
Although Rafale was declared lowest bidder in January 2012, the deal has not been inked so far due to cost escalation. And the cost negotiation committee, which was set up in February 2012 to work out the modalities for the deal, has not reached a conclusion after 30 months of negotiations.
An official said, “The final negotiation for the upgradation of Mirage took three years. This is a very big contract, complex,” he said adding, “it takes time”.
Recently, during French Foreign Minister Laurent Fabius’ visit to India in July, New Delhi had raised serious concerns over cost escalation of the fighter jet deal.
Officials claim that in 2007, when the tender was floated, the cost of the programme was $12 billion (Rs 42,000 crore). When the lowest bidder was declared in January 2012, the cost of the deal shot up to $18 billion (Rs 90,000 crore). And now with inclusion of transfer of technology, life cycle cost and creating Assembly line, the deal has crossed a whopping $20 billion.
The Air Force is seeking to replace its ageing MiG-21s with a modern fighter and MMRCA fits between India’s high-end Sukhoi-30MKIs and its low-end Tejas LCA lightweight fighter.