With French Foreign Minister laurent Fabius taking up with Defence Minister Arun Jaitley the much delayed 126 medium multi-role combat aircraft deal (MMRCA) here on Monday, indications are that the deal will go through very soon. The initial cost of the deal when the project was conceived in 2006 was Rs 45,000 crore. The price tag now may cross Rs 80,000 crore.
The visiting Minister is also expected to push hard French-manufactured Rafale’s case when he meets Prime Minister Narendra Modi on Tuesday. With the Dassault-produced fighter jet emerging as the lowest bidder, the Defence Ministry and the French company are engaged in protracted contract negotiations for the last two years.
Fabius urged Jaitley to expedite the contract negotiations and told mediapersons before the meeting that he was hopeful of a positive outcome of the ongoing negotiations. The French Minister also expressed keenness to have a robust partnership with the Indian defence industry to make weapons and related equipment.
Hinting that most of the issues like life cycle cost and work share agreement between Dassault and Hindustan Aeronautics limited (HAl) were now sorted out, officials said the contract will be inked at the earliest.
India will buy 20 aircraft off the shelf and the remaining planes will be manufactured by HAl in India after inking the transfer of technology pact. Moreover, Dassault will invest at least 50 per cent of the contracted amount back into the Indian industry as part of offset agreement. This will enable the Indian public and private sector defence industry to get hold of state-of-the-art technology.
The IAF, meanwhile, urged the Government during its presentation to Jaitley recently that any further delay in procuring MMRCA will hit its operational preparedness. These planes will replace nearly 240 MIG-21s which according to plan were to be phased out by 2017. However, delay in firming up the contract may push the deadline beyond 2018.
The UPA-II Government could not sign the contract even after bringing the contract negotiations to its final stages earlier this year due to paucity of funds. Keen to meet operational requirements of the armed forces, the new Government will have to set aside nearly Rs 15,000 crore as the first installment in the forthcoming budget.
Officials ruled out the possibility of the NDA Government scrapping the MMRCA project saying it will send a wrong message to the world that India is not a reliable country to do business with. More than seven years have passed since the tender was floated followed by technical trials and opening of the commercial bids to shortlist the lowest bidder. The present political dispensation realises that this effort cannot be allowed to go waste, they said.
Addressing mediapersons after meeting his counterpart Sushma Swaraj, Fabius said France hopes that with the new Government, which was keen on efficiency, the implementation of the decision will be swift and expressed confidence of a “positive outcome” to the ongoing negotiations in the MMRCA deal.
Asserting that there was a difference in “some time” and “too long,” Fabius said Rafale meets all the requirements of India, including cutting-edge technology and highest quality.
“It is true some elements and several of them have taken a long time. It is fair that for complex matters it takes some time, but there is a difference between some time and too long. And we have some examples there. We should see with the new Government, which is particularly keen upon efficiency and the implementation of administrative decisions which are taken... We shall see with the new Government how to implement rapidly those decisions that are already taken and I will discuss that with the Prime Minister as well.” he told reporters.
However, the French Minister said the deal was “developing positively” and France was confident of a swift final outcome. He added that it was not only important to say yes for a deal but also when it will happen and what will be the terms.
