MRCA deal:

 Govt to hold fresh discussions with Dassault to break Rafale logjam

With no significant headway in negotiations for the purchase of 126 multi-role combat jets since July because of a logjam over France's reluctance to give an assurance for Rafale aircraft produced in India, another round of discussions has been scheduled for next month.

Sources said that the defence ministry has sought a guarantee for all 126 Rafale fighter jets that India will purchase from French aircraft maker Dassault. Under the proposed agreement, 108 aircrafts will be built in India by state-run Hindustan Aeronautics Limited (HAL) under a transfer of technology arrangement.
While much of the negotiations have been completed, further progress in determining the final cost of the mammoth procurement programme hinges on France accepting the defence ministry's condition that Dassault should take the responsibility for all the aircraft and not just the first lot of 18 that will be flown in from France.
If this core issue is sorted out, then it is only a matter of time for completing the rest of the negotiations, sources said. The government is confident it will take three months to wrap up the final contract from the date this condition is met by the French side.
Dassault's top boss Eric Trappier was in India recently to break the ice but there was no forward movement. Another round of discussions will be held soon to resolve the issue. The French aircraft maker is willing to give training and documents for building the aircraft but it has so far refrained from giving an assurance on the final product as it cannot supervise the work done in an Indian company. There are several intricate issues linked to the condition. Even HAL will not accept supervision by a foreign vendor. The resolution of this issue is critical for determining the final cost of the deal, which is often described as "mother of all contracts" because of the massive price tag that will be attached to the purchase.
The government selected Rafale as the new fighter for the Indian Air Force around three years ago after it emerged on top by defeating five other competitors in technical evaluations. Dassault also turned out to be the lowest bidder, compared to the F-18 Super Hornet, F-16, Eurofighter, Gripen and MiG-35.
The delay in finalising the contract and a change of government in New Delhi has provided an opportunity to those who lost out to try to remain in contention. A whole new debate has been ignited by raising questions about the big ticket purchase on the grounds that cheaper options are available.
The government has not given any indication of a re-think as negotiations have continued with Dassault. Adding to the meddle is Brazil's decision to buy Grippen instead of Rafale. Apart from IAF, all eyes were on Brazil's decision. After much flip-flop, Brazil chose to buy 36 Gripen NG fighters for $5.475 billion.