IANS/New Delhi

French Defence Minister Jean-Yves Le Drian arrives here today to sign the formal deal for supplying 36 Rafale aircraft, the medium multi-role combat fighters of Dassault, to the Indian Air Force as agreed during Prime Minister Narendra Modi’s visit to Paris last month, officials said.
Also keenly watched will be: Which Indian firm Dassult picks as a partner for a manufacturing base in India. Officials explained the main reason why the Indian prime minister had agreed so fast to take the deal forward was it fit well into his “Make in India” campaign.
“So a joint venture partner will be key and let’s see,” an official said.
The basic agreement is expected to be signed between France and India soon after similar pacts Paris entered into with Egypt for 24 Rafael fighters. The value of the deals with Egypt is around $7.1bn, while with India it is in the region of $9bn, officials said.
“We are aware that Dassault will have large number of aircraft to deliver. If we take the orders from India and Egypt together, the number of aircraft will be 60. So delivery is certainly an issue and we will raise it during the defence minister’s visit,” a senior official in the know said.
“I’m also told the rate of production for each Rafale is around one month,” said the official. “But we’ve had a 30-year association with Dassault, thanks to the Mirage 2000 programme. This was a pretty successful deal. So deliveries will happen, we will also have good safeguards.”
Explaining the finer contours of the deal, officials said that it could be an agreement both between the two governments and their respective defence ministries, as also with Dassault Aviation - as this will give India a guarantee from the French government, along with the flexibility for the company on other aspects.
For example, the deal - among the first to be entered into under the Indian government’s new offsets programme - will require the French to invest around 30-50% of the value of the contract in India for manufacturing units.
This will call for some collaborations and joint ventures in India for Dassault. Defence Secretary R K Mathur had also confirmed recently that this was, indeed, the first deal under the new offsets rule, requiring the French to make components and other articles here.
The offsets contract is expected to be in the range of $3 to $4.5bn - the biggest ever in India.
“The agreement is also very important for Dassault. In addition to the 84 aircraft on order, it also has to cater to the French Air Force. So, a pact for a manufacturing unit in India will help the French firm to build on the existing line at Merignac,” another official said, referring to the facility near Bordeaux, southwest France.
India’s original plan was to buy 126 Rafale aircraft - valued at around $11bn in the first tender floated in 2007. The planes were envisaged to be made in India with Hindustan Aeronautics Ltd. Given the delays, Modi had announced a truncated deal, to begin with, during his visit to France last month.
But a cumbersome process for military procurements has been blamed by a parliamentary panel for India missing out on “the mother of all deals.”
“It is observed that the deal for 126 aircraft could not be finalised. The committee feels this is attributable to the long gestation period of the Defence Procurement Procedure (DPP),” Parliament’s Standing Committee on Defence said in its report tabled earlier this week.
The committee, headed by Maj Gen B C Khanduri (retd) of the ruling Bharatiya Janata Party, hoped that the changes in the DPP that are due this year will remove such shortcomings.
The IAF had expressed an urgent need for the 126 medium multi-role combat jets to primarily replace its ageing fleet of Soviet-era MiG-21 planes and to plug the gap caused by the delay in the development of the indigenous Tejas light combat aircraft (LCA). The IAF currently has 33 combat squadrons against a sanctioned strength of 39.5, which is sought to be raised to 42.

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