India says budget cuts won't delay Rafale talks

BANGALORE Wed Feb 6, 2013 7:10pm IST

1 of 2. A Dassault Rafale combat aircraft, which has been selected by the Indian Air Force for purchase, performs during the inauguration ceremony of the ''Aero India 2013'' at Yelahanka air force station on the outskirts of Bangalore February 6, 2013.

Credit: Reuters/Stringer

Related Topics

Stocks

   

BANGALORE (Reuters) - The government pledged on Wednesday not to let defence cuts disrupt efforts to finalize a potential $10 billion purchase of French warplanes, but both sides played down expectations of a landmark deal in time for a visit by French President Francois Hollande next week.

India picked the Rafale combat jet, made by Dassault Aviation (AVMD.PA), for exclusive negotiations over a year ago after a hotly contested bidding war with rival manufacturers, but is still to finalize the 126-aircraft deal.

"The Rafale purchase is being reviewed by a cost negotiation committee," Defence Minister A.K. Antony told reporters.

"There are six to seven layers of procedure after that. We cannot cut short the procedure," Antony said at an air show in Bangalore.

"There is no question of delay because of the budget cuts."

In Paris, officials said the complex negotiations were going smoothly but ruled out a signature during a visit to India by Hollande on February 14-15.

"Things are moving quite quickly. We hope the contract can be concluded as soon as possible but it won't be during the visit," said a French diplomatic source who declined to be named.

"India never signs military contracts during political visits, but above all, the contract is not ready yet."

India, the world's biggest arms importer in recent years, plans to spend around $100 billion over the next 10 years in upgrading its mostly Soviet-era military hardware to keep pace with China's ramping up of defence spending.

Despite the modernization push, India's defence budget will not escape a tightening of government spending this year, Antony said, as New Delhi looks to rein in its fiscal deficit.

(Reporting by Anurag Kotoky and Ananthalakshmi Ananthsankar in Bangalore and Elizabeth Pineau in Paris; Writing by Henry Foy; Editing by Tim Hepher)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Hydrogen-Powered

Hydrogen-Powered

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Korea Boat Tragedy

Korea Boat Tragedy

Hundreds still missing in deadly Korea ferry sinking.  Full Article 

Ukraine Crisis

Ukraine Crisis

Putin risks upstaging talks on defusing Ukraine crisis .  Full Article 

Xi's Master Plan

Xi's Master Plan

China's Xi purging corrupt officials to put own men in place - sources.  Full Article 

Mobile Tariff Up

Mobile Tariff Up

RComm to raise mobile call tariff by up to 20 percent.  Full Article 

Spanish Football

Spanish Football

Bale stunner claims King's Cup win for Real over Barca.  Full Article 

Taking Charge

Taking Charge

Afghan women stand to be counted as West begins to disengage.  Full Article 

Sparking Boom

Sparking Boom

BlackBerry's meltdown sparks start-up boom in Canada's Silicon Valley.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage