France's Defence Minister is Heading to Delhi.

France's Defence Minister is Heading to Delhi.

Key Points

• France's defence minister is heading to Delhi for talks on the stalled MMRCA acquisition
• Indian sources said that most issues had been resolved in negotiations, but a deal was not imminent

French defence minister Jean-Yves Le Drian will arrive in India for a two-day visit , during which he will try to end the nearly three-year deadlock over the sale of 126 Dassault Rafale fighters to the Indian Air Force (IAF).

He will hold discussions with Manohar Parrikar in New Delhi, in what will be the new Indian defence minister's first meeting with an overseas counterpart.

Senior IAF officers told that it was unlikely that the Medium Multi-Role Combat Aircraft (MMRCA) contract for the Rafales would be signed during Le Drian's visit, but affirmed that the trip could help progress towards a deal by the end of the current financial year in March 2015.

Official sources said the Ministry of Defence (MoD) had completed negotiations with Dassault on a large part of the draft contract, which reportedly runs to about 15,000 pages.

Under the terms of the contract, 18 Rafales are to be delivered to the IAF in flyaway condition within 36 months of the deal being signed. The remaining 108 would be licence-built by Hindustan Aeronautics Limited (HAL).

The sources said the impasse over Dassault's reluctance to accept responsibility for these 108 platforms - with regard to delivery schedules, quality assurance, and liquidated damages - which had stalled the deal for months, had now been settled.

"Both sides [Rafale and HAL] have arrived at a compromise that appears acceptable to the MoD," a senior IAF. This resolves a major blockade that was delaying the contract after Rafale was shortlisted in January 2012 from among six contenders vying for the MMRCA tender, he added.

Final approval is now awaited from the MoD's Cost Negotiation Committee, officials said.

"The Rafale deal is likely to be signed sooner than later, possibly within the next few months," military analyst Air Marshal V K Bhatia (retd) said. "It seems that the new [Bharatiya Janata Party] BJP government is mindful of the IAF's dire operational requirements".

The IAF currently operates around 32 fighter squadrons, 10 fewer than the sanctioned strength of 42. This number is likely to drop further as several fighter types, like MiG-21s and MiG-27s, are due for retirement by 2017-18.