NEW DELHI — France has quietly insisted that an $8.9 billion government-to-government (G2G) deal with India be signed before a 50 percent offset deal for Rafale fighters is finalized, according to a French Embassy source in India.
"We have concluded multiple discussions with state-owned Defence Research and Development Organisation (DRDO) and other agencies to execute 30 percent offsets in India's ongoing and futuristic military aerospace programs, but no [offset] deal will be finalized until the final Rafale contract is signed," said the source, who spoke on condition of anonymity.
As part of the Rafale deal, France has made a 30 percent offset commitment for military aerospace research and development programs and a 20 percent offset commitment for making components for Rafale fighters with domestic firms in India.
French defense companies Safran, Thales, MBDA and Dassault have also committed to proving stealth, radar, thrust vectoring for missiles technologies and materials for electronics to DRDO and domestic defense companies.
"We simply cannot make [Rafale] negotiations public", said an Indian Ministry of Defence (MoD) procurement official, who also spoke on condition of anonymity.
As part of G2G discussions, France has also agreed to kick-start the unsuccessful Kaveri gas turbine jet engine for the homemade light combat aircraft Tejas.
French Defence Minister Jean-Yves Le Drian, left, and his Indian counterpart Manohar Parrikar show off the intergovernmental agreements for the purchase of 36 Rafale jet fighters at a joint news conference in New Delhi on Jan. 25, 2016. India and France have signed an agreement on the long-delayed purchase of 36 Rafale jet fighters but have yet to reach a deal on financial issues, Indian Prime Minister Narendra Modi said that same day.
Photo Credit: Prakash Singh/AFP via Getty Images
At present, the Kaveri engine lacks sufficient power thrust, efficiency and dependability.
An upgraded Kaveri engine with 90 kN thrust can be developed in two years' time with French cooperation, according to the French Embassy source.
Currently the Tejas is powered by a General Electric F404 engine.
"We have detailed discussions with the French teams to revive [the] Kaveri engine project and it is now for MoD to take a final call," according to a senior DRDO scientist, who spoke on condition of anonymity.
Meanwhile, the MoD is yet to respond to the Indian Ministry of Law and Justice's findings on the Inter-Governmental Agreement (IGA) on the Rafale deal, the MoD defense procurement official said.
Defense Minister Manohar Parrikar had informed the parliament May 3 that the federal ministry had reviewed the IGA and that the findings would be taken into account when finalizing the deal.
It is for the political leadership to take final call on [Rafale deal, he added.
And prior to that, Dassault chairman Eric Trappier said in an April 13 radio report that he expected a contract could be signed "in the next few days," adding: "I have high hopes this contract could be signed fairly quickly."
The MoD procurement official said that no negotiations on the Rafale deal between France and India have taken place in more than six weeks, and the next meeting is yet to be scheduled.
In addition to 36 Rafale fighters, India is also buying Mica air-to-air missiles, Scalp air-to-ground missiles, Meteor beyond-visual-range missiles and precision-guided munitions at a cost of $1 billion for immediate requirements, and India is expected to order five years' maintenance and engineering support at a cost of $500 million.
No one knows when [Rafale] deal will be finalised and singed, MoD procurement official said .
Vivek Raghuvanshi is the India correspondent for Defense News.