New Delhi: France is likely to seek an early clinching of a $20 billion (around Rs.1.2 trillion) deal to sell India 126 fighter aircraft during the visit of foreign minister Laurent Fabius to New Delhi early next week, people close to the development said on Thursday.
Both sides are to sign 15-16 preliminary pacts to cement cooperation in higher education during Fabius’ three-day visit. Discussions between Fabius and his Indian host Sushma Swaraj would cover civil nuclear energy, trade, tourism, space and climate change.
Terrorism and unrest in Afghanistan, Iraq, Syria and western Africa besides the economic situation in the euro zone are the other issues likely to figure in the discussions.
Fabius, a former prime minister of France who arrives on Sunday night, is the first foreign minister from a Western nation to visit India since the new National Democratic Alliance government took office a month ago. One of his first engagements on Monday would be a visit to the Indian Space Research Organisation’s Sriharikota launch site from where an Indian rocket carrying a French satellite Spot 7 will be sent into orbit, one of the people said. All of them declined to be named.
“The purpose of the visit clearly is to reach out to the new Indian government and have a clear idea of the direction the government is taking,” said one of the people.
Fabius “will confirm a standing invitation” to Narendra Modi to visit France, the person said, adding that the invitation was extended to Prime Minister when French President Francois Hollande conveyed his congratulations to Modi for winning the 2014 general elections. France hopes Modi will visit by the end of the year, the person said.
When asked about the contract for the multi-billion dollar combat aircraft project to acquire 126 French Rafale fighters, the person said there was no timeline for the conclusion of the deal. The deal includes many issues like the transfer of technology, offsets under which French aircraft maker Dassault Aviation will have to plough back 50% of the contract value back into India and partnership with the state-run Hindustan Aeronautics Ltd (HAL) for co-production.
“With regard to the partnership with HAL, which is designated as the key agency for the implementation of the transfer of technology and production, Dassault Aviation and HAL have reached an agreement a month ago on how to organize the Rafale production in India. This was a very important step,” said the person.
In 2012, India chose the Rafale over three others, including the Eurofighter Typhoon manufactured by the European Aeronautic Defence and Space Co, which was earlier this year rebranded as Airbus Group NV. India has been looking for an fighter jet for its Air Force. The Air Force has 34 squadrons as against an operational requirement of 44, according to newspaper reports.
On civil nuclear cooperation, the person said the French were keen on seeking clarifications on how India’s nuclear liability law would be implemented and what would be the consequences of any possible nuclear accident. In 2010, India’s state-run Nuclear Power Corp. of India Ltd signed a pact with France’s Areva SA to buy two European Pressurised Reactors (EPR) each with a capacity to produce 1,650MW of electricity and uranium supply for a period of 25 years at Jaitapur in Maharashtra. These units are first of six that will be constructed at Jaitapur and are expected to be commissioned by 2018. The complex will have an overall capacity of 10,000MW.
Referring to liability of the vendor of an atomic power plant in case of an accident, a second person familiar with the developments said, “We don’t expect any accidents of a nuclear nature.” There were two EPRs under construction in China and a further two in Britain, the person said.
The fate of the India-European Union free trade agreement, in negotiations since 2007, would also be raised by French side at the talks with Swaraj, said a second person.
With France hosting the next conference of parties on climate change, India and France will be discussing how to reach a consensus at the meeting scheduled to be held in December 2015.
“Our approach as president of the conference is to reach out to every participant and help find a consensus to limit carbon emmissions,” this person said.
The visiting French minister will also likely discuss the situation in Syria, the presence of European nationals among the fighters in that country as well as the surprising advance made by the Islamic State of Iraq and the Levant in Iraq, the second person cited above said.