French defence minister in India to salvage Rafale deal

French defence minister in India to salvage Rafale deal
French Defence Minister Jean-Yves Le Drian attends a session of Questions to the Government, on January 21, 2015 at the French National Assembly in Paris.

NEW DELHI - France's defence minister will on Tuesday hold talks with his Indian counterpart in a fresh bid to nail a troubled deal to sell 126 Rafale fighter jets.

Jean-Yves Le Drian will meet his counterpart Manohar Parrikar on a brief visit to New Delhi aimed at preventing the collapse of the sale, which has been snagged for three years and now faces new questions over cost.

France is hoping to salvage the deal ahead of a visit to Paris by Prime Minister Narendra Modi in April.

French company Dassault Aviation won the right in January 2012 to enter exclusive negotiations with India to supply 126 Rafale fighters, with experts saying a final deal could be worth US$12 billion.

The idea is for Dassault to supply 18 of the twin-engine fighters later this year while the remaining 108 would be made by state-run Hindustan Aeronautics Ltd under technology transfer agreements with India.

But negotiations have proved fraught, both under Modi's government and its Congress predecessor, while a committee looking into the deal has reportedly found that it was not the cheapest option.

France's defence ministry has said Tuesday's visit will give the governments a chance to discuss "international affairs and defence industry issues", but there is little doubt Rafale will dominate proceedings.

Modi's right-wing government, which won power in elections last May, has been blowing hot and cold about the progress of discussions.

A defence ministry spokesman said during Le Drian's visit in December that outstanding differences "would be resolved in a fast-track manner".

But the government has also commissioned a report about the project costs, adding yet more uncertainty.

Speaking at an air show in Bangalore last week, Parrikar said he expected the contract negotiation committee (CNC) to submit its report within weeks.

"I have asked the CNC to speed up the process of completion of the report for us to take a decision on the acquisition of Rafale," he told reporters.

Le Drian arrived in New Delhi late Monday and will leave on Tuesday afternoon after meeting Parrikar.

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