India seeks to settle French fighter jet dispute ahead of PM’s trip
India has asked France’s Dassault Aviation SA to stick to the original price tag for fighter jets or risk losing one of the world’s biggest military aircraft deals, the Times of India reported on Tuesday.
Talks on the proposed purchase of 126 Rafale planes have been ongoing for more than three years to resolve differences over pricing as well as local assembly. The deal is back in focus as Prime Minister Narendra Modi visits France this week. The deal was initially worth $12 billion but is now widely estimated to have jumped to $20 billion, primarily because of the implications of building some of the jets in India. The Times quoted an unidentified Indian official as saying Dassault wanted to raise the price to cover the increased cost of local production, and that any such escalation could be a deal-breaker.
A defence ministry spokesman was not immediately available to comment on the report. Dassault was also not available. Under terms of the contract, 18 of the planes will be sold ready-to-fly while the rest will be assembled at an Indian state-run facility as part of a government effort to build a domestic military-industrial base.
Source: By Reuters, NEW DELHI, April 08, 2015