French have marginally reduced Rafale price: Govt sources

January 28, 2016 04:31

The French have "marginally" reduced the price of Rafale combat planes but India is seeking more and the multi-billion dollar deal could take at least another six weeks to be finalised, government sources said.

The price for 36 Rafales, as per the UPA tender, keeping the cost escalation and dollar rate in view, comes to over over Rs 66,000 crore (around 9 billion Euros), they said. This includes the cost involved in making changes that India has sought in the aircraft, including Israeli helmet-mounted display and some specific weaponry, among others.

"The effort is to bring down the price to around Euros 8 billion (over Rs 59,000 crore)," the sources said, adding that the actual price negotiations only started from January 21. "They have come down from the original price as per the earlier tender of the UPA but we expect more," they said.

Another point under discussion is the payment of advance which India will have to make. "At least 50 per cent advance will have to be made, including 15 per cent immediate payment," the sources said, adding that details on how the French government will stand guarantee was being worked out.

"Also, the document (Inter-Governmental Agreement) will need legal vetting and clearance from the Cabinet Committee on Security," the sources said.

They also said that 50 per cent offset will apply to the deal. The French had initially not agreed to it but the roadblock was removed in August last year after Modi spoke to Hollande over phone.

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