India plays hardball in Rafale price negotiations, Parrikar promises to save money

Amid persisting differences over the price of 36 Rafale fighter jets India has agreed to buy from France, Defence Minister Manohar Parrikar has underlined that he will try to extract the best deal and save money for the nation. India had signed an inter-governmental pact with France to buy 36 Rafale fighters but the price negotiations are still on. The total deal-size is estimated to be around $9billion for the 36 jets. However, India is trying to negotiate for a price of $6.85 billion. The price differential is a huge one – around $2 billion. This means there are still tough negotiations ahead.   Speaking about the negotiations, Mr Parrikar stressed that he is a “tough negotiator” and wants the “best price” for Rafale fighter jets from France. He added that the budget for next fiscal takes into account the Rafale deal for which “adequate money” has been kept aside. “I am a tough negotiator. Let me save money for the nation,” Mr Parrikar told reporters in Delhi when asked why the deal has not been signed yet. He also emphasised that he was aware that the IAF needs the aircraft. “I think a good buyer does not put his weakness in front. He always keeps his cards close to his chest. Please don’t ask me to disclose my cards in national interest,” Mr Parrikar added. “Many times it is better to cross the bridge when it comes”, Mr Parrikar said on alternative options for the IAF, if the Rafale deal does not go through. It is estimated that 15 percent of the total payment will have to be made immediately when the deal is signed. During French President Francois Hollande’s India visit in January 2016, the two countries had inked a pact for the purchase of 36 aircraft, but differences over pricing proved to be a hurdle in finally signing the deal.