Prime Minister Modi on his current three-nation visit starting on the 10th of April, just struck a quasi final agreement on buying 63 jets for $ 7.7 Billion. The Rafale was picked in 2012 over competitive offers from the United States, Europe and Russia for a deal initially worth $12 billion however had hopped to $20 billion.
French Defence Minister Jean-Yves Le Drian held several chats with his Indian counterpart in New Delhi for months to salvage an arrangement to supply 126 Dassault Rafale fighter jets that had been stalled on the issue of local assembling of the aircraft. Dassault Rafale Deal has been a point of discussion between India and France for some 3 years now and has been mired in the differences, twofold, the pricing of the product and the issue of local assembly.
Initially under the terms of the agreement, 18 of the Rafale planes will be sold prepared to fly while the rest will be assembled at a state-run Indian facility as part of the government’s effort to build a domestic military-industrial base. Previously India demanded that Dassault Aviation assume full liability for the airplane delivered at Hindustan Aeronautics Ltd. plant in Bengaluru.
Besides France had said it would help Hindustan Aeronautics stick to delivery plans; however the point of contention was the guarantee over the production of the aircraft made at an unit in India on which Rafale had no regulatory or expert control. Thus it all boiled down to the issue of certification.
Indian Defence Minister Manohar Parrikar said previously that the administration would decide on the destiny of the Rafale deal only after the ministry’s negotiation committee had submitted its report in early March.Finally the situation has been brought under control.The Indian Defence officials and the French delegation of Dassault Rafale had been in talks over the past several weeks to try and find a way around the issue of certifications.
As per latest records the Indian military needs to begin a replacement activity of its jet fleet from 2017 thanks to the ageing of the fleet.
As expected Dassault shares rose by 4.6 % post the finalization of India France Dassault Rafale deal.