Government to decide on Rafale fighter jet deal only after March: Manohar Parrikar

BENGALURU: The government will decide on the long-delayed $12 billion deal with France's Dassault Aviation for 126 Rafale fighter jets -India's biggest defence order to date -only after February, with a committee tasked with studying the contract finalised by the UPA expected to submit its report at the earliest only by end-February .Defence Minister Manohar Parrikar told reporters in Bengaluru on Wednesday that he had asked the Contract Negotiation Committee (CNC) that is looking into the deal to submit a report by the last week of February or early March and that he did not want prejudge its suggestions.

“There is no premature indication to CNC. Let them complete their process. I can only assure you that I have told them to do it faster. I will ensure that they put it to me faster at least in last week of February or first week of March,“ Parrikar told reporters.The Rafale was picked in 2012 over rival offers from the US, Europe and Russia by the UPA government, but a deal to finalise the contract has proved elusive.The government and Rafale's manufacturer Dassault have been locked in a stalemate over contract terms concerning guarantees from the supplier. Under the contract terms, Dassault was supposed to directly supply just 18 of the aircraft directly with the rest will be manufactured in India by state-owned Hindustan Aeronautics Ltd (HAL). Dassault has been reluctant to provide guarantees for the aircraft that are produced by HAL: Government will decide on the fate of a long-delayed deal for 126 Dassault Rafale fighter jets only after March, defence minister Manohar Parrikar said on Wednesday.

The ministry's Contract Negotiations Committee (CNC) should report back by early March, the defence minister told a media conference at the Aero India airshow in Bengaluru.

He declined to say when a final decision was likely on the contract, which was initially worth $12 billion and could go up to $20 billion.

The Rafale was picked in 2012 over rival offers from the United States, Europe and Russia. A final deal has been held up due to a stalemate over a crucial component of the deal.

Under the terms of the contract, the winning bidder will supply only 18 of the aircraft directly and the rest will be manufactured in India by state-owned Hindustan Aeronautics.

Dassault, however, has been reluctant to provide guarantees for the aircraft that are produced in India.

"It would be clinically insane for Dassault to guarantee HAL-built planes. The only way forward for the program is to drop this absurd idea," said Richard Aboulafia, vice-president of analysis at aerospace and defence consultancy Teal Group.

Some Indian news reports have indicated that the deal could be in trouble.

A French source, however, told Reuters on Tuesday that this week's sudden and unexpected deal with Egypt for 24 Rafale jets could speed up several other sets of talks, including those in India.

France is in "final stage" of negotiations to sell up to 36 of the aircraft to Qatar, and is in talks with both Malaysia and the United Arab Emirates, the source added.