Will Hollande's visit clear the decks for Rafale deal?

With French President Francois Hollande on a 3-day visit to India, all eyes are on the 9$ billion Rafale jet deal between India and France.

Prime Minister Narendra Modi during his visit to France had announced the purchase of 36 Rafale fighter jets citing it as "critical operational necessity" for the Indian AirForce.

Why the deal is stuck?

The purchase of 3 dozen French-built Rafale warplanes seems to have been stuck over the pricing issue. Along with the weapons package, each Rafale aircraft reportedly costs over 100 million euros or Rs 800 crore. Efforts have been on from the Indian side to reduce the price of the fighter plane by at least 20 per cent.

"The Rafale is a major project for India and France. It will pave the way for an unprecedented industrial and technological cooperation, including 'Make in India', for the next 40 years. Agreeing on the technicalities of this arrangement obviously takes time, but we are on the right track," Hollande said in an interview to PTI.

Hollande is expected to push for the Rafale deal during the bilateral talks with Modi on Monday.

Other deals

While the fate of the Rafale deal still hangs in suspense, the two countries have been able to see other major areas of cooperation.

A deal to build six French nuclear reactors in western India is forthcoming between the two countries, which could be formally sealed on Monday.

India sought to upgrade its waterways, rail and mass transit system in the proposed Smart cities with the cooperation from France. The Memoranda of Understanding (MoUs), which cover a wide range of sectors like urban development, urban transport, water and waste treatment and solar energy, have been signed in the presence of Modi and Hollande. Under the MoUs, experts in the fields of urban transport, water and waste treatment, solar energy, urban planning and architecture and heritage will assist the three cities - Chandigarh, Nagpur and Puducherry - with their smart city development plans.

A joint Venture between Indian SITAC group and EDF Energie Nouvelles was also signed to acquire 50 per cent stake in its renewable energy business in Gujarat. This JV investment is worth 155 million euros in 2016 and would generate 142 MW power. Its objective is to produce one gigawatts wind energy in five years period.

Hollande, who will be the guest of honour at India's Repulic Day parade on Tuesday, said that both countries have been hit by terrorism and express solidarity with each other. The two countries will be looking ahead to increased cooperation on military equipment, he said.

Mahindra, Airbus JV for military helicopters

Taking forward the memorandum of understanding signed in July, Mahindra Defence and France's Airbus Helicopters inked a pact to form a joint venture to produce military helicopters in India.

"We have made significant progress in setting up the joint venture and together the companies are creating a world-class advanced helicopter production facility in India," Mahindra and Mahindra Group President for Aerospace and Defence S P Shukla said in statement.

The companies are proposing to set up a final assembly line in India, develop tier-1 and tier-2 suppliers and make extensive transfer of technology, with the intent to ultimately achieve 50 per cent indigenous content.