In a bid to end the deadlock in the negotiation for the sale of 126 Rafale combat jets to the Indian Air Force, French aircraft-maker Dassault Aviation bosses have come to the country to seal what is often termed as "mother of all defence deals". A team of officials of Dassault, Thales and Snecma - the three original equipment manufacturers of Rafale - is Bangalore talking to Indian aviation company Hindustan Aeronautics Limited - the lead partner in producing the aircraft in India - to resolve the issue of workshare agreement, sources said .
India had picked Rafale for exclusive negotiations in January 2012. But the deadlock over the workshare between Dassault and its Indian Production Agencies (IPAs) and the lead partner had become a bone of contention delaying Read the whole acquisition process.
The IAF had earlier this month asked the French officials to resolve the differences with HAL to move forward as it sought to end the sense of uncertainty that has gripped the contract.
"The difficult part of the negotiations over the transfer of technology and the mandatory spin offs have already been finalised but there is uncertainty about who will provide what," a source said.
As is known, 18 aircraft would be purchased in fly away condition from France while the rest would be made in India. Dassault has identified 17 IPAs who will provide the components for the aircraft along with HAL.
The logjam in the Rafale deal has lead to a delay in the purchase of new fighters which are crucial for IAF to check the depleting combat jet squadron strength. There is a sense of urgency because even if move forward, the contract might be finalised only by the end of this year when a new government would be in place HAL chairman R.K. Tyagi is expected to go on a follow up visit to France later this month to meet officials at the highest level. That apart, the IAF will also have to wait for some more time to add to its fleet - Apache attack helicopters, Chinook heavy lift helicopters and new Airbus refuellers as India looks to cap the purchases for the financial year by buying new missiles to make its Jaguar combat jets more potent.
With multi-role combat jet deal still in a limbo, the IAF has exhausted its budget to buy new aircraft and equipment for fifth year in the running but it will not be able to conclude three other contracts - purchase of 22 Apache helicopters, 15 Chinook helicopters and six A330 refuelling tankers - which are in advanced stages of negotiations with the vendors.
The IAF had hoped to clinch these purchases within till this financial year. The price negotiation have been concluded for the purchase of 15 Chinook heavy lift helicopters as only final signatures by the acquisition team members were needed to seal an estimated `7000 crore contract.
The process of price negotiations resumes this month after a set back suffered in the form of sudden demise of joint secretary in charge of air acquisitions A.K. Bal in October 2013. The final price for Chinook helicopters was finalised in September 2013 itself, but it is expected to move forward this month.
After the conclusion of price negotiations which is expected to be wrapped up by Januaryend, the agreements would go to cabinet committee on security for final clearance. The whole process can take more than three months as it has undergone stringent scrutiny from department of finance. This would mean that they might be ready for CCS approval by the end of this financial year despite being in advanced stages.
The last major deal for this financial year would be the purchase of 384 MBDA advanced short range air to air missiles. The contract, which is part of upgraded Jaguar's weaponisation programme, is worth 2000 crore.