The Rs1,10,000 crore defence procurement cleared by the defence ministry will give a big push to Prime Minister Narendra Modi's `Make in India' campaign despite the multi-billion dollar purchase of fighter jets from France's Dassault Aviation, defence minister Manohar Parrikar said.
This is because the deal to sell 36 Rafale jets will allow Dassault Aviation to set up manufacturing facilities in India to augment its existing production line in Merignac in France, which in turn will promote Modi's `Make in India' campaign, the defence minister stated.
This, according to defence sources, will not only allow the French firm to ramp up production rate but will also help meet offset obligations in India, which is likely to be 30-50 per cent of the sales value.
Parrikar on Monday said the ministry has cleared overall defence procurements for the Army, Navy and the Air Force worth Rs1,10,000 crore, of which 90 per cent are under 'Make in India'.
This would mean a Rs99,000-crore boost to domestic defence production.
India is in urgent need of the fighter jets and the modalities of the deal will be worked out during the forthcoming visit of French defence minister to India. ''This visit will focus on firming up the broad parameters for the deal under which the contract would eventually be inked,'' the defence sources said.
French defence minister Jean-Yves Le Drian, who is currently in Qatar in connection with a similar Rafale deal, is expected to reach India on 5 May. He will have talks with his Indian counterpart Manohar Parrikar and National Security Advisor Ajit Doval, sources added.
Reports quoting French sources said they ''are open to any idea'' but insisted that nothing has been fixed as yet. ''We will have to see how the meeting will go and then get a feedback to actually decide what can be done. We are open to all ideas. Something will have to be done,'' they said.
As of now, Dassault Aviation manufactures one Rafale aircraft per month. But with three major orders totalling 84 aircraft, all of which have to be delivered fast, Dassault will have to look for alternative ways if deliveries of the aircraft are to be speeded up.
Besides India's order for 36 Rafales, Dassault has contracted to sell 24 fighter jets to Qatar and an equal number to Egypt. It also has to service pending orders of the French Navy.