France optimistic about Rafale jets deal with India

France today said it was optimistic about negotiations to sell 126 Rafale fighter jets to India in a contract estimated to be worth USD 15 billion.

French Defence Minister Jean-Yves Le Drian, who has just returned from New Delhi, said he was optimistic about talks to sell the Rafale jets to India.

"We are in a positive process, I hope it will come to a successful conclusion. It has progressed well," Le Drian told the French channel BFM-TV.

Earlier this week, India and France agreed to iron out contentious issues like pricing and a guarantee clause for French firm Dassault to fast-track the deal.

The issue came up for discussion during the delegation- level talks between Defence Minister Manohar Parrikar and Le Drian in New Delhi earlier this week.

India had in 2012 selected the Rafale jet but the final negotiations are still continuing between the Defence Ministry and Dassault Aviation.

The deal with India is a big one for the Rafale fighter as it will be the first mega export order for the aircraft.

Though the deal was first valued at about USD 10 billion in 2007 when the Request for Proposal (RFP) was issued, the figure has shot up to over USD 15 billion.

Differences have cropped up over various issues from pricing to work-sharing.As per the RFP, the first 18 jets are to be imported and the rest manufactured under licence by Hindustan Aeronautics Ltd (HAL).

According to Defence sources in New Delhi, Dassault was reluctant to stand guarantee for the 108 fighters to be built by HAL as far as liquidity damages and timelines for production was concerned. This, the sources say, is the critical issue that is delaying the inking of the deal.