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India nears deal for purchase of 36 Rafale jets with France for $8.8 billion

India TV Business Desk 15 Apr 2016, 23:30:28 IST
India TV Business Desk

New Delhi: After several rounds of negotiations, India has finally agreed on a deal with France for 36 Rafale fighter jets. The cost of the deal for the purchase of these 36 Rafale aircraft  has been finalised at 7.8 billion euros (approximately $8.8 billion), sources told IndiaTV. The figure is much lower that the $12 billion being quoted by France earlier. 

While the first of the Rafale jets will be made available to India in 18 months, the final agreement on the same will be signed in a month’s time.

The cost agreed upon for the deal regarding the 36 aircraft made by Dassault Aviation with weapon systems is a significant climbdown by France, which had been insisting on $12 billion for the sale.

In signs of some tough negotiations that appear to have gone through into finalising the deal, India has managed to closed the deal nearly 3 billion dollars below France's asking price.

Read also: Rafale deal: French Defence major Dassault says no change in pricing

India’s first confirmation of India’s order for the purchase of the 36 Rafale jets came during Prime Minister Narendra Modi’s visit to Paris last year. The deal has been languishing for years as the two sides had failed to reach an agreement over the unit price and the assembly of planes in India.

It was expected that the deal would be closed during the visit of French President Francois Hollande in January this year. However, price negotiations stretched long and the deal could not be finalised.

The deal will come as a big relief for the Indian Air Force which has repeatedly stressed on the need for modernising its ageing jet fleet, especially in view of the rising capabilities of China and Pakistan.