Article Posted on : - Mar 11, 2015

NEW DELHI (PTI): India's multi-billion dollar Rafale fighter jet contract with France continues to be stuck in the doldrums even as the two countries have agreed to "fast-track" the negotiations.

But while forward movement is awaited in this regard, defence sources made it clear that the upcoming visit of Prime Minister Narendra Modi to France and the fighter jet deal were two separate issues which cannot be linked.

"There are some issues which still persist because of which the final contract is pending for such a long time," defence sources in New Delhi said when asked if the issues relating to pricing and the guarantee clause had been sorted out.

Talking about chances that the deal would be worked out ahead of Modi's visit to France next month, the sources maintained the two were not linked.

"The Rafale deal is not linked to the official visit of the Prime Minister. These are two separate things. An official visit is not only about signing defence deals," the sources said.

They made it clear that the makers of Rafale -- Dassault Aviation -- will have to stand by the clauses of the Request for Proposal (RFP) to which they had agreed.

Asked if that meant that the ball was in the French court as far as the mega-budget deal was concerned, the sources said "one could say so."

Meanwhile, talking about the likely options in case the Rafale deal were to fall through, the sources said that Indian defence procurement rules do not permit any lateral entry and a fresh tender was the only solution if the contract does not get signed.

The sources, however, refused to give a timeline for a final decision.

They also insisted that the Rafale deal and the joint development project with Russia for a Fifth Generation Fighter Aircraft (FGFA) are two different things.

"There is no link between the two. We want to speed up the process on the FGFA front, but that has got nothing to do with the Rafale deal," they said.

The French Rafale and the Eurofighter Typhoon were the only ones left standing after years of tests on technical and other aspects vis-a-vis the move to acquire Medium Multi-Role Combat Aircraft for the Indian Air Force (IAF).

"Rafale was selected in 2012 since it was the lowest bidder. The difference in cost with the second bidder was razor thin. With cost now more than double, how can it be the lowest bidder," defence sources had said in January while explaining why the negotiations for finalising the contract were taking so much time.

Another point of contention is the guarantee clause under which Rafale has to stand guarantor for the planes that would be manufactured by state-owned HAL.

As per the RFP issued in 2007 for the 126 jets, the first 18 are to be imported while the remaining ones are to be manufactured under licence by the Hindustan Aeronautics Ltd (HAL).

In February, Dassault Aviation CEO Eric Trappier said that the pricing remains the same from day one and it has not wavered from the RFP.

However, defence sources insist it is otherwise.

French Defence Minister Jean-Yves Le Drian had last month held talks with his Indian counterpart Manohar Parrikar in New Delhi to salvage the contract.

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