France on Sunday provided India with its final price offer for the 26 Rafale Marine jet deal for the Indian Navy, with reports indicating that the cost of the combat aircraft has been significantly reduced after multiple rounds of negotiations.
The development, reported by news agency ANI, came just ahead of the planned visit by Indian National Security Advisor Ajit Doval to the country.
In June, reports had indicated that the deal for the Navy's 26 Rafale Marine jets was likely to be worth over Rs 50,000 crore. However, the current estimated cost for the aircraft is not publicly known after France's reported lowering of prices.
In June, reports had indicated that the deal for the Navy's 26 Rafale Marine jets was likely to be worth over Rs 50,000 crore. However, the current estimated cost for the aircraft is not publicly known after France's reported lowering of prices.
What's the latest update on the India-France Rafale-M deal?
Speaking to the news agency, unnamed defence sector sources said that France had submitted "the best and final price offer" to the Indian authorities, following tough negotiations. According to them, a considerable price reduction has been offered in the proposed contract.
India and France are in talks for the procurement of 26 Dassault Rafale Marine jets, which are to be deployed on the INS Vikrant aircraft carrier.
The acquisition process, which has been in the works for over three years, saw progress last week, when a French delegation reportedly visited New Delhi to finalise the discussions with Indian officials.
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According to reports, the deal will now be discussed during the India-France Strategic Dialogue, where the Indian NSA is scheduled to meet his French counterparts starting Monday in Paris.
Commercial discussions between India and France have been ongoing for more than a year, with the contract being processed via the government-to-government route, similar to the previous Rafale acquisition for the Indian Air Force (IAF).
How did India get France to lower the Rafale-M price?
After multiple rounds of negotiations, the price for the Rafale Marine jets has been significantly reduced, with the deal being benchmarked against the 2016 contract for 36 Rafale jets for the IAF, an Economic Times report revealed, citing unnamed sources.
With New Delhi and Paris having reportedly arrived at a final price bid, both parties are nearing the conclusion of a deal.
Earlier, the Defence Acquisition Council, led by Defence Minister Rajnath Singh, approved certain amendments in the letter of request -- the equivalent of a tender document in government-to-government deals -- that resulted in the submission of the final price bid, according to the Economic Times report.
One of the changes reportedly involved dropping the initial plan to integrate the indigenous Uttam active electronically scanned array (AESA) radar and weapon systems, including the Astra beyond visual range and Rudram anti-radiation missiles, into the naval Rafale jets, due to the high cost to be paid to the French side for the modifications and the estimated eight-year timeline for completing the integration.
This could be one of the reasons that France has slashed the final price for the Rafale Marine jets.
Why does the Indian Navy want Rafale Marine jets?
The Indian Navy requires 26 4.5-generation fighter jets capable of operating from its aircraft carriers, with the deal being significant for the force as it seeks to bolster its maritime strike capabilities.
While the integration of indigenous sensors and weapons might not reportedly be on the cards at present, certain IAF requirements have also been incorporated into the naval deal, such as the inclusion of approximately 40 long-range drop fuel tanks, which can extend the jet's range for maritime operations, according to ANI.
Sources told the Economic Times that apart from compatibility with the IAF's Rafale fleet, the Navy's jets will also be equipped with specialised anti-ship weaponry.
The Rafale Marine jets will also be equipped with Meteor long-range beyond visual range air-to-air missiles.
The deal is reportedly intended to be finalised before the end of this financial year.