Article Posted on : - Feb 25, 2015

A Rafale multi-role combat aircraft from Dassault Aviation of France manoeuvres during the inauguration of the AERO INDIA 2015, Asia's Premier Air show at Yelhanka Air Base. A PTI photo.

NEW DELHI (PTI): French Defence Minister Jean-Yves Le Drian on Tuesday held talks here with his Indian counterpart Manohar Parrikar to salvage the multi-billion Rafale contract even as a deadlock continues to hold up the deal.

As the two ministers met, the Cost Negotiating Committee (CNC) is understood to have submitted its report to the Ministry of Defence.

Le Drian met with Parrikar for 45 minutes at his South Block office here during which the French Minister took up the issue of the Rafale deal.

The Ministry of Defence as well as the French officials remained tight-lipped over what transpired at the meeting.

"This (visit) was a serious attempt to thrash out the issues that continue to dog the deal," official sources said even as they refused to share any more information.

They said that the efforts between the two sides would be to decide the issue at the earliest.

The visit by the French Minister comes just two months after he and Parrikar met and decided to "fast-track" the contract negotiations for the nearly USD 10-billion deal for 126 Rafale fighter jets.

Defence sources have said that a decision on the deal is likely to be taken ahead of Prime Minister Narendra Modi's proposed visit to France in April.

Parrikar had recently said he would not comment on the Rafale deal as the discussions were ongoing under CNC, which was asked to expedite the process.

Defence sources said that three of the four sub-committees negotiating the Rafale tender had completed their tasks of determining offsets, maintenance support and technology transfer to HAL to licence-produce Rafales.

The fourth, CNC, was in consultation with Dassault and was scheduled to submit its report on Tuesday.

The main issue concerns the pricing, which is basically the production cost in India, and Dassault's reluctance to stand guarantee for the 108 fighters to be built by state-run HAL.

India had selected Rafale for the deal in 2012 but the final contract is yet to be signed. While 18 jets are to be bought off the shelf, 108 are supposed to be manufactured here by HAL.