Price keeps Rafale waiting in wings

Modi, Hollande seek work on Jaitapur

Differences over price stopped India and France from signing the proposed multi-billion dollar inter-governmental agreement for purchase of 36 Rafale fighter jets for the Indian Air Force.

However, Prime Minister Narendra Modi and French President Francois Hollande on Monday witnessed inking of an MoU, which put on record progresses made by negotiators.

Notwithstanding protests by the ruling BJP’s ally Shiv Sena, Modi joined Hollande to push for early commencement of works on the proposed nuclear power plant at Jaitapur in Maharashtra.

They prodded the Électricité de France (EDF) and the Nuclear Power Corporation India Limited (NPCIL) to conclude talks for techno-commercial deals covering all the six proposed units by the end of 2016 and commence works on the project in early 2017.

Modi and Hollande together boarded the metro and went to Gurgaon before the meeting.

Hollande is currently on a tour to New Delhi to be the chief guest on the occasion of the Republic Day of India on Tuesday. Hollande and Modi on Monday had two back-to-back meetings – first a one-to-one and then another with aides joining them – and reviewed progress in bilateral ties, ever since the prime minister’s maiden bilateral visit to France in April 2015.

Apart from the MoU on purchase of Rafale, Modi and Hollande on Monday witnessed signing of 13 pacts to boost bilateral cooperation in diverse fields like, railways, food safety, space, tourism, culture and science and technology. France has agreed to help India develop Chandigarh, Nagpur and Puducherry as “smart cities”.

The multi-billion dollar Rafale deal was to be the highlight of Hollande visit to India. The negotiators could not narrow differences, particularly on the issue of price of each aircraft along with its weapon system.

“It is a matter of satisfaction that both sides almost concluded negotiations on the Inter-Governmental Agreement on purchase of 36 Rafale jets, except on some financial aspects,” the prime minister said, while jointly addressing mediapersons along with the French president at Hyderabad House in New Delhi. “We have agreed that the financial aspects would be resolved very soon.”

Defence Minister Manohar Parrikar and his French counterpart Jean-Yves Le Drian inked the MoU (Memorandum of Understanding), which, according to Foreign Secretary S Jaishankar, put on record progresses made in the negotiations on issues other than financial aspects, like technical specifications of the aircraft and the weapon systems.

Hollande said that the MoU was “a decisive step for the purchase of Rafale” and the financial aspects would be resolved very soon. Sources said that while the estimated cost of the 36 Rafale jets along with weapon systems were pegged at about Rs 60,000 crore by France, India had been insisting on bringing it down.

Hollande and Modi welcomed revision of the February 2009 MoU between Areva and the NPCIL, raising the scope of the pact from construction of two reactors at Jaitapur Nuclear Power Plant to six. They prodded the EDF, which of late took over the nuclear arm of Areva, and the NPCIL to conclude techno-commercial negotiations by the end of 2016 for construction of all the six reactors.

“There is no better trust than sharing civil nuclear technology,” Hollande said, referring to level of trust between France and India. “From smart cities, locomotives, railway tracks and nuclear power – these are all foundations for building a new commercial partnership,” said Modi.