Rafale fighter deal: India, France agree to iron out differences

02 December 2014

The defence ministers of France and India have agreed to resolve any differences and finalise the sale of 126 Rafale fighter jets to India in a deal worth an estimated $15 billion India's largest one-time purchase of combat aircraft, the Indian defence ministry said on Monday.

France's Dassault Aviation has been trying to clinch the deal to sell India its Rafale jets since the previous UPA government chose the company over other manufacturers in 2012. But disagreements over cost and work-sharing have slowed talks, while India's weak economy has stretched government finances.

On Monday, French defence minister Jean-Yves Le Drian met his Indian counterpart Manohar Parrikar, who was appointed defence minister last month.

"Both sides agreed to take forward the strategic co-operation between the two countries. They discussed all issues including Rafale. It was decided that whatever differences still existed would be resolved in a fast-track manner," said Indian defence ministry spokesman Sitanshu Kar.

Under the deal, which would provide a major boost to French domestic defence manufacturing, the first 18 planes will be made in France and shipped to India, while the remaining 108 will be produced by state-run Hindustan Aeronautics Ltd (HAL).

The final phase of exclusive negotiations on the contract should conclude within India's current budget year ending in March 2015, Dassault chief executive Eric Trappier said last month.

Rival manufacturers including the makers of the Eurofighter aircraft are hoping that the stalled Rafale deal will collapse, possibly opening the door to negotiations by India with a new vendor.


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