Some earlier reports had claimed the negotiations had run into rough weather over the “offset clause” and tweaking of weaponry technology,which was “driving up the cost”. One key issue was the IAF seeking modifications on the Rafale so that a particular set of weapons could be integrated on it. After expressing the intention to acquire 36 French Rafale fighters, defence minister Manohar Parrikar had some months ago told Parliament that the earlier-issued Request for Proposal in 2007 for 126 Medium Multi-role Combat Aircraft had been “withdrawn”. The Rafales would now be acquired by a separate process.
Dassault, which manufactures the Rafale, had earlier been selected the lowest financial bidder in the MMRCA process, but as the protracted contract negotiations made no headway, India had decided — during Mr Modi’s visit to France — to acquire 36 Rafales by a separate process.In a detailed statement in a written reply to Parliament, Mr Parrikar had said: “As per the India-France Joint Statement issued by the two countries during the Prime Minister’s visit to France, the Government of India conveyed to the Government of France that in view of the critical operational necessity for Multi-role Combat Aircraft for Indian Air Force (IAF), the Government of India would like to acquire (36) Rafale jets in flyaway condition as quickly as possible. The two leaders agreed to conclude an Inter-Governmental Agreement (IGA) for supply of the aircraft on terms that would be better than conveyed by Dassault Aviation as part of a separate process underway, the delivery would be in timeframe that would be compatible with the operational requirement of the IAF; and that the aircraft and associated systems and weapons would be delivered on the same configuration as had been tested and approved by the IAF, and with a longer maintenance responsibility by France. A Negotiating Team has been constituted to negotiate the terms and conditions of the procurement of 36 Rafale jets and recommend a draft agreement. The meetings of the Indian Negotiating team with the French side have commenced.”