PARIS AND NEW DELHI — Dassault Aviation expects India to sign a contract for Rafale fighter jets in a month’s time, following Monday’s signing of an intergovernmental, with France opening the door to the sale of 36 Rafale fighters, the aircraft builder said.
France saw the signing as a big step forward but the financial negotiations remain to be closed, said President François Hollande, Reuters reported.
“During French President François Hollande's visit to India, French and Indian government authorities signed an intergovernmental agreement paving the way for the conclusion of a contract for the sale of 36 Rafale fighters to India,” Dassault said in a statement. “Dassault Aviation is very pleased with this progress, and is actively supporting French authorities in their efforts to finalize a complete agreement within the next four weeks.”
Defense Minister Jean-Yves Le Drian signed the intergovernmental agreement with his Indian counterpart, reported daily Le Figaro, owned by the Dassault family.
A joint statement issued after the delegation talks in New Delhi between Indian Prime Minister Narendra Modi and visiting Hollande said, "The two leaders welcomed the conclusion of the IGA on the acquisition of 36 Rafale fighter aircraft in flyaway condition, except for some financial issues relating to the IGA which they agreed must be resolved as soon as possible."
That agreement was "a decisive step," Hollande said, adding: "There remain financial issues which will be sorted out in a couple of days," Reuters reported.
The financial negotiations could take some time, said a source close to the deal, business daily Les Echos reported. “I bet Dassault concludes a deal with the United Arab Emirates before India,” the source said.
Hollande was in India with five government ministers and the chairmen of Dassault, MBDA, Safran and Thales, respectively the prime contractor and manufacturer of missiles, engines and systems for the Rafale.
Dassault held a seminar Sept. 30 with more than 130 subcontractors in the Rafale supply chain, setting out the plan to build three aircraft a month from the end of 2018, Dassault’s inhouse magazine reported. Dassault presently builds one per month, or 11 a year, as the Merignac assembly line, near Bordeaux, closes in August, a traditional holiday month for manufacturers.
The prime contractor asked each supplier to submit reports by the end of October detailing their ability to meet the higher delivery rate and how they would deal with any lack of reliability on their systems, the report said.
“The success of all of us depends on each one of us,” said Jean-Marc Gasparini, director of military aircraft programs, the report said.
That increased production anticipates the signing of a third foreign contract, following export deals with Egypt and Qatar for the fighter. France is also in talks with the UAE for the Rafale.
Hindustan Aeronautics Ltd. delivered the first Mirage 2000 upgraded by the HAL overhaul division to the Indian Air Force in September, three weeks earlier than the official schedule, Dassault’s inhouse magazine reported.
State-owned HAL is Dassault’s local partner on the Mirage upgrade.
That early delivery was due to a “successful first flight” and qualification completed in record time, the report said. Dassault completed midlife upgrade of the first two of 51 Mirages and handed over work for the remaining 49 units to HAL overhaul division in Bangalore, India.
The Mirage modernization contract, reported to be worth €1.4 billion (US $1.5 billion), was signed in July 2011.
Airbus Helicopters and Mahindra Defence Agreement Reached
Meanwhile, with a multibillion-dollar tender for Indian Navy helicopters on the radar, Airbus Helicopters of France and Mahindra Defence, the defense arm of domestic $16 billion auto major Mahindra & Mahindra, signed a joint venture agreement Sunday in the presence of Hollande and Modi in Chandigarh.
"We have made significant progress in setting up the joint venture and together the companies are creating a world-class advanced helicopter production facility in India," Mahindra and Mahindra Group President for Aerospace and Defence Satya Prakash Shukla said in statement.
The companies propose to create a final assembly line in India, develop tier-1 and tier-2 suppliers and make extensive transfer of technology, with the intent to ultimately achieve 50 percent indigenous content.
"Through this partnership, we target building several of our globally leading helicopter models in India. This will lead to the transfer of state-of-the-art technologies, development of manufacturing activities and creation of high-skilled jobs in India," said Airbus Helicopters President and CEO Guillaume Faury.
The Indian Navy proposes to buy more than 200 light utility and multi-role helicopters in the next 10 years.
The joint venture is a follow up an agreement of intent signed between the two companies in July to build variety of helicopters for use by Indian defense forces.