Narendra Modi impresses France, Airbus tells PM Narendra Modi it’s ready to Make in India, will hike outsourcing kitty to $2 billion
Francois Hollande said “The two countries signed an agreement on proceeding forward on the atomic project of Jaitapur.”
Marking a breakthrough in the protracted talks for striking the French Rafale jet deal, Prime Minister Narendra Modi announced here on Friday that India would buy 36 of the fighter planes in flyaway condition, citing critical operational requirements of the Indian Air Force.
Mr. Modi made the announcement at a joint press conference with French President Francois Hollande after their summit talks at Elysee Palace.
“Keeping in mind the critical operational necessity of fighter jets in India, I have talked to him [Hollande] and requested for 36 Rafale jets in flyaway condition as quickly as possible under a government-to-government deal,” he said.
An agreement on proceeding forward on the stalled nuclear project in Jaitapur in Maharashtra was among the 17 pacts signed after the talks between Modi and Hollande.
The Jaitapur project, where French company Areva is to set up six nuclear reactors with a total power generation capacity of about 10,000 MW, has been stuck for long because of differences over the cost of the power generated.
The agreement between India’s Larsen and Toubro and France’s Areva is aimed at cost reduction by increasing localisation and to improve the financial viability of the Jaitapur project.
The original deal was for 126 fighter aircraft under the Medium Multi-Role Combat Aircraft contest, which began in 2007. Dassault Rafale was shortlisted in 2012 after rigorous evaluation but negotiations have been stuck over pricing and delivery guarantees for the aircraft manufactured by Hindustan Aeronautics Ltd. (HAL) in India.
A direct purchase will drive down the costs as there is no technology transfer involved and the delivery of aircraft will be faster.
Depleting fleet swung Rafale deal
The major reasons for the direct purchase of 36 Rafale jets from France are the fast-depleting fighter strength of the Indian Air Force, unending delays in the Medium Multi-Role Combat Aircraft negotiations and the steep price rise.
The fighter aircraft strength has fallen drastically to 34 squadrons from the sanctioned 42 and is set to further dip with the phasing out of MiG-21s and MiG-27s in the next few years. The Chief of the Air Staff, Air Chief Marshal Arup Raha, has flagged the issue on several occasions. The MMRCA and the Light Combat Aircraft (LCA) Tejas, the replacements, are nowhere on the horizon. Also with the price crossing $20 billion, funding this was a concern for the government with other major modernisation programmes in the offing.
Another pact reached during negotiations related to pre-engineering agreements between the NPCIL and AREVA in connection with studies that is intended to bring clarity on all technical aspects of the Jaitapur plant so that all parties (AREVA, ALSTOM and NPCIL) can firm up their price and optimise all provisions for risks still included at this stage in the costs of the project.
France also informed India of its decision to implement a scheme for expedited 48 hours visa issuance for Indian tourists.
Noting that Mr. Hollande had supported the “Make in India” initiative, especially in the defence sector, Mr. Modi said that in the area of nuclear power, France had been a major partner with India.
France also announced an investment of 2 billion euros in India as Mr. Modi invited French companies to pump in money in technology in the fastest-growing economy.
France will invest 2 billion euros in India, Mr. Hollande announced at a CEO forum here.
He said France would partner India in urban development of infrastructure such as railways and defence and nuclear sector.
Modi has ‘Naav Pe Charcha’ with French President
Mr. Modi and Mr. Hollande enjoyed a joint boat cruise on La Seine river here which was described as “Naav Pe Charcha” (chat on the boat).
MR. Hollande was seen giving details to Mr. Modi about various areas as the boat cruised through the river.
Many people enjoying a boat ride in the river at that time were seen waving at the dignitaries, including French ministers.
The two leaders had the boat ride after their detailed discussions, focusing on cooperation in the areas of civil nuclear energy, defence, space and trade.
Mr. Modi is visiting France in the first leg of his nine-day three-nation tour that will take him to Germany and Canada also.
It was the first time that Modi had ‘Naav Pe Charcha’ with any world leader.
Earlier, Mr. Modi has had ‘Chai Pe Charcha’ (chat over tea) with some world leaders, including US President Barack Obama during his visit to New Delhi in January and Japanese Prime Minister Shinzo Abe during the Indian leader’s visit to that country last year.
The concept of ‘Chai Pe Charcha’ came to be known during Modi’s campaign for Lok Sabha polls last year. During that, he used ‘Chai Pe Charcha’ as an election plank.
— PMO India (@PMOIndia) April 11, 2015
— Gopal Baglay (@MEAIndia) April 11, 2015