Rafale jet deal: More delays likely as France rejects bank guarantee

Business Standard

Instead, France offers a ‘comfort letter’ from prime minster; India yet to reply

BS Web Team  |  New Delhi May 25, 2016 Last Updated at 12:11 IST

The deal between and for 36 Rafale fighter jets has hit another roadblock, with the French government rejecting India’s request for a sovereign or bank guarantee, The Indian Express reported Wednesday.  Instead, it has offered a “comfort letter’ from that country’s Prime Minister, the report said.

India is yet to reply to any of the letters written by the French side. Earlier, the Law Ministry had raised objections to the French refusal to give a bank guarantee. The Defence Ministry declined to answer the newspaper’s queries, saying it wouldn’t comment on an ongoing deal. According to the report, the French Defence Minister on April 1 wrote to Indian Defence Minister  saying that Euro 7.8 billion for 36 jets is the best deal his country can offer. India asked for a 30% cut in the Euro 10.8 billion deal.

The deal is for the purchase of 36 fighter jets manufactured by Dasssault Aviation. Earlier, India was supposed to buy 126 of these fighters, but after price negotiations failed, that number was cut to 36. India will have to make 15% of the payment at the time of signing the deal.

There have been significant delays in the deal. It started off in 2012, but since then both the countries have gone on election mode and the change in government resulted in renegotiating the deal from scratch. Since India scaled down its demand from 126 fighters to 36, it will receive them in ready-to-fly condition. However, the first jet will be delivered in 36 months after the signing of the deal and the last will be delivered over seven years.

India is going for a changed configuration of the jets, unlike Qatar and Egypt, who purchased the same version flown by the French air force. India has demanded an Israeli helmet-mounted camera and a third-party weapons system.

There was a chance to close the deal this year when French President Francois Hollande visited India as the chief guest on Republic Day. But price negotiations once again came in the way. Now, the deal faces further delays given Presidential elections in France next year.


Longest saga in history for 36 Rafale jets!

I’m running out of Rafale pics to post!

“However, the first jet will be delivered in 36 months after the signing of the deal and the last will be delivered over seven years.”

If it takes that long go for Gripen E and everything will be solved

See related post:

India to select fighter jet under ‘Make in India’ by March: Manohar Parikkar 

 The Swedes have handed India an irresistible offer

Sweden to customise offer to push Gripen-NG fighter aircraft deal with India

‘Make in India’ pitch to sell Swedish fighter for air force

 Flat Refusal: India Dismisses US Offer of F-16 Jets


Move Over Tejas. India Wants A Second Line Of Fighter Jets.

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