India-France fighter-jet negotiations stall, report

French aircraft maker Dassault’s negotiations with the Indian government over a 10 billion-euro Rafale jet deal have stalled over the production of some of the fighter-planes in India, reports say.

Reuters/Stringer

The sale, one of the biggest defence deals ever, is for the purchse of 126 Rafales.

Negotiations began in January 2012 and Delhi is insisting that Dassault only build 18 with the other 108 being made by Hindustan Aeronautics Limited (HAL).

But Dassault has refused to take responsibility for the planes produced by HAL, according to the Indian Express newspaper, citing anonymous sources.

It wants two separate contracts so that it is not responsible for delays, which could lead to financial penalties, in HAL’s factories.

State-run HAL is currently Dassault’s partner in upgrading French-made Mirage jets and produces British, Russian and European aircraft under licence.

But Dassault has reservations about its ability to handle the complex manufacturing and technology transfers that are part of the deal.

The Indian government has “completely rejected” Dassault’s proposal, the Indian Express says.

The contract will be worth between 10 billion and 16 billion euros and will be the French firm’s first export contract for the Rafale, which beat six rivals from Russia, the US and Europe to win it.

European group EADS is reported to be hoping to win it if the current negotiations fall through.