The French have “marginally” reduced the price of Rafale combat planes but India is seeking further reduction in the price, a government source said on Wednesday.
The issue of financial transaction of the multi-billion dollar deal could take at least another six weeks to be finalised, the government sources have said.
The price for 36 Rafales, as per the UPA tender, keeping the cost escalation and dollar rate in view, comes to over over Rs 66,000 crore (around 9 billion euros), but the Indian government is trying to bring it down to 8 billion euros (over Rs 59,000 crore), the source said.
This includes the cost involved in making changes that India has sought in the aircraft, including Israeli helmet-mounted display, weaponry, among others.
Also read: President Hollande, PM Modi Sign MoU to Buy 36 Rafale Aircraft
Advance Payment and Offset
Another point under discussion is the payment of advance which India will have to make.
Government SourceThey have come down from the original price as per the earlier tender of the UPA but we expect more. At least 50 percent advance will have to be made, including 15 percent immediate payment. Also, the document (Inter-Governmental Agreement) will need legal vetting and clearance from the Cabinet Committee on Security.
Prime Minister Narendra Modi and French President Francois Hollande Modi had agreed to conclude an Inter-Governmental Agreement for supply of the aircraft “on terms that would be better than conveyed by Dassault Aviation as part of a separate process underway”, which was the MMRCA (Medium Multi-Role Combat Aircraft) tender.
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They also said that 50 percent offset will apply to the deal.
The French had initially not agreed to it but the roadblock was removed in August last year after Modi spoke to Hollande over phone.
MoU of Purchase Signed
An Memorandum of Understanding was signed by the two governments over the purchase on 25 January, while President Hollande was on a visit to India.
Statement Dassault Aviation, Rafale ManufacturerWe are very pleased with this progress, and actively supporting French authorities in their efforts to finalise a complete agreement within the next four weeks.
They said the agreement will pave the way for the “conclusion of a contract” for the sale of 36 Rafale fighters to India.
(With inputs from PTI)
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