doublemaster
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Is it normal our PM first takes credit and then does work?
France wants ‘Egypt deal’ price as new benchmark; offset clause another bone of contention
Indicating a likely price escalation, the French side was learnt to have made the Egypt deal its new benchmark for price of the Rafale jets for India. This was in contrast to the earlier indications that France had offered the aircraft to India at a price at which it sold the fighters to its own air force. The ongoing government-to-government negotiations were also learnt to have been stuck over the offset clause, which calls for mandatory involvement of Indian industry in the manufacturing of the aircraft, and the likely price escalations that may occur due to the modifications required on the jet to accommodate indigenous integrations. “The French side has made the price offered to Egypt the new benchmark. Further cost escalations were discussed due to the modifications that may be required to integrate Indian systems on board the fighters,” a Defence Ministry official said. In February, Egypt signed a contract to buy 24 Rafale jets from France in a 5.2 billion euro deal.
In April, India agreed to buy 36 Rafale jets from France in a flyaway condition. The government-to-government agreement, which was announced during Prime Minister Narendra Modi’s visit to France, sidelined the then ongoing negotiations with French manufacturer Dassault for buying 126 fighter jets. As agreed during the PM’s visit, the Indian and French teams are now busy negotiating in Delhi to thrash out the fine print of the contract which remains to be signed. According to sources, one of the contentious points of the ongoing negotiations was the offset clause, which requires 30 per cent indigenous content in defence contracts costing more than Rs 300 crore. While Dassault had offered 50 per cent indigenous content in the earlier 126 Rafale jet deal, there is lack of clarity regarding offsets in the purchase of the 36 jets. “In the earlier deal, the negotiations involved talking to the manufacturer- Dassault. In present case, the talks are between the two governments. Unlike US, France does not have Foreign Military Sales (FMS) route and thus does not have any provision for discharge of offsets. This is clashing with the Indian requirement which views offsets as a prime boost to the Indian industry. Further, this fits well in line with the government’s Make in India initiative..It is unlikely that the Indian side will part with/dilute the offset requirement,” a defence ministry official said. Sources further indicated that the IAF’s requirement of integrating indigenous weapon systems on board the Rafale jets may require modifications on the original platform, which may add to the cost.
Rafale deal talks run into rough weather | The Indian Express
France wants ‘Egypt deal’ price as new benchmark; offset clause another bone of contention
Indicating a likely price escalation, the French side was learnt to have made the Egypt deal its new benchmark for price of the Rafale jets for India. This was in contrast to the earlier indications that France had offered the aircraft to India at a price at which it sold the fighters to its own air force. The ongoing government-to-government negotiations were also learnt to have been stuck over the offset clause, which calls for mandatory involvement of Indian industry in the manufacturing of the aircraft, and the likely price escalations that may occur due to the modifications required on the jet to accommodate indigenous integrations. “The French side has made the price offered to Egypt the new benchmark. Further cost escalations were discussed due to the modifications that may be required to integrate Indian systems on board the fighters,” a Defence Ministry official said. In February, Egypt signed a contract to buy 24 Rafale jets from France in a 5.2 billion euro deal.
In April, India agreed to buy 36 Rafale jets from France in a flyaway condition. The government-to-government agreement, which was announced during Prime Minister Narendra Modi’s visit to France, sidelined the then ongoing negotiations with French manufacturer Dassault for buying 126 fighter jets. As agreed during the PM’s visit, the Indian and French teams are now busy negotiating in Delhi to thrash out the fine print of the contract which remains to be signed. According to sources, one of the contentious points of the ongoing negotiations was the offset clause, which requires 30 per cent indigenous content in defence contracts costing more than Rs 300 crore. While Dassault had offered 50 per cent indigenous content in the earlier 126 Rafale jet deal, there is lack of clarity regarding offsets in the purchase of the 36 jets. “In the earlier deal, the negotiations involved talking to the manufacturer- Dassault. In present case, the talks are between the two governments. Unlike US, France does not have Foreign Military Sales (FMS) route and thus does not have any provision for discharge of offsets. This is clashing with the Indian requirement which views offsets as a prime boost to the Indian industry. Further, this fits well in line with the government’s Make in India initiative..It is unlikely that the Indian side will part with/dilute the offset requirement,” a defence ministry official said. Sources further indicated that the IAF’s requirement of integrating indigenous weapon systems on board the Rafale jets may require modifications on the original platform, which may add to the cost.
Rafale deal talks run into rough weather | The Indian Express
