The defence acquisition council (DAC) cleared the Indian Navy’s proposals to acquire 26 Rafale-M jets and three submarines from France on July 13

India and France are yet to conclude negotiations on technical and commercial aspects of deals for the Indian military’s planned acquisition of 26 Rafale Marine combat jets and three Scorpene submarines, people familiar with the matter said on Tuesday.

Negotiations will now be done by entities on the two sides, including French firms and the Indian defence ministry.

The defence acquisition council (DAC) cleared the Indian Navy’s proposals to acquire 26 Rafale-M jets and three submarines from France on July 13, the day the Indian Prime Minister Narendra Modi began a two-day visit to Paris. It had been widely anticipated that formal announcements about the deals would be made during the visit.

The people, who spoke on condition of anonymity, said too much should not be read into the two deals not figuring in a 25-year roadmap issued at the conclusion of Prime Minister Narendra Modi’s visit on July 14. India, they said, is “very clear” about acquiring the Rafale-M jets and Scorpene submarines.

Negotiations will now be done by entities on the two sides, including French firms and the Indian defence ministry’s department of procurement, to finalise technical and commercial aspects of the deals before final contracts are signed, the people said.

France’s Naval Group and state-run Mazagon Dock Shipbuilders Limited (MDL) signed a framework memorandum of understanding (MoU) on July 6 on building three Scorpene submarines in India. Naval Group signed another agreement with the Defence Research and Development Organisation (DRDO) in January for fitting air-independent propulsion (AIP) systems on the submarines.

This will be a follow-on order to an earlier deal whereby MDL built six Scorpene or Kalvari-class submarines with technology from Naval Group under a ₹23,562-crore programme called Project-75.

Since the original deal was concluded in 2005, further discussions are required on pricing, the people said.

The deals for the Rafale-M jets and Scorpene submarines are on track, though the two sides have to negotiate issues such as pricing, date of delivery and the “Make in India” component, the people said.

The two deals are estimated to have a combined value of €9 billion to €10 billion, though the final price will be determined after complex negotiations between India and France.

The people sought to make a distinction between the move by General Electric and Hindustan Aeronautics Limited (HAL) to manufacture GE-F414 jet engines in India for the Light Combat Aircraft Mark 2 and plans for joint development of a new engine by France’s Safran Group and DRDO to power India’s next generation advanced medium combat aircraft (AMCA).

In the case of the GE F-414, the Indian side is purchasing an engine developed in the 1970s and will manufacture 80% of it in the country but won’t have access to 20% of it, including “very critical technology”, the people said. Safran Group proposes to work with DRDO to develop an engine that will be akin to a bespoke suit and meets the specific requirements of AMCA, they said.

This is in line with France’s plans to design the next generation of military equipment with India, rather than simply transferring technology. The Indian side will be able to export this new engine and will also be well placed to develop the following generation of engines without anybody’s help, the people said.

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