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India and France have agreed to iron out issues like pricing and a guarantee clause for French firm Dassault to fast-track the estimated $15-billion deal for 126 Rafale fighter jets.
The issue came up for discussion during the delegation- level talks on Monday between Defence Minister Manohar Parrikar and his French counterpart, Jean-Yves Le Drian.
"The talks were held in a cordial atmosphere. All issues related to India-French defence cooperation were discussed," Ministry Spokesman Sitanshu Kar said on Tuesday.
India had in 2012 selected the Rafale jet but the final negotiations are still continuing between the ministry and Dassault Aviation.
The sources confirmed that the Rafale deal came up during the discussions and that both sides agreed there were matters on which differences still exist between the two.
However, Parrikar told his French counterpart that these 'would be resolved in a fast-track manner'. Both sides also agreed to take forward the partnership which they had envisaged in 1998.
The deal with India is a big one for the Rafale fighter as it will be the first mega export order for the aircraft.
The final negotiations for the multi-billion dollar deal have been stuck on a number of issues ranging from pricing to work-sharing.
As per the Request for Proposal (RFP) issued in 2007, the first 18 jets are to be imported and the rest manufactured under licence by Hindustan Aeronautics Ltd (HAL).
According to sources, Dassault was reluctant to stand guarantee for the 108 fighters to be built by HAL as far as liquidity damages and timelines for production was concerned.
This, the sources say, is the critical issue that is delaying the inking of the deal.
The Defence Ministry is of the view that the guarantee clause was part of the Air Staff Qualitative Requirements (ASQR) under the RFP.
Dassault had agreed to the ASQR and hence was selected for the deal, sources maintained.
"How can the ASQR be relaxed? This is not allowed under the Defence Procurement Procedure, 2013," sources said.
