The negotiations are underway and IGA & offset contract are yet to be finalised. The details, including transfer of technology through offsets, will emerge after the negotiations are completed.” The Rafale aircraft will have advanced features like advanced electronically scanned array radar, mid-air refuelling and advanced electronic warfare equipment as part of its design. Though the final cost of the deal for 36 aircraft has not yet been finalised, India has asked France to discharge a 50% offset liability of the overall contract cost. It emerges now through sources, who did not want to be named, that Parrikar has not been meeting officials from France at the level of India’s director general (acquisitions), ministry of defence, but the negotiations are going on at the level of ambassador in New Delhi
. The deal has also been delayed as the French side has not been able to address the concerns raised by the ministry of law. As reported by FE in May, the deal ran into legal troubles when the French manufacturer Dassault Aviation offered a ‘diluted’ liability clause, which has been rejected by the Indian side since the law ministry felt that it ‘adversely’ compromised India’s interests.
The law ministry also rejected Geneva as the arbitration destination in the event of any dispute, and proposed Delhi, which the French side has opposed. Parrikar at that time, in a written reply to Rajya Sabha, had said, “Ministry of Law & Justice has made certain observations and the same will be adequately taken into account while finalising the IGA (inter-governmental agreement), which is still under negotiations”. This is not the first time that the liability clause has come up as a hurdle. Even when discussions were going on for the purchase of 126 MMRCA, the liability clause was opposed by the French side, said sources.