Any future Indian purchase of Rafale jets will come through direct talks with the French government, the defence minister said on Monday, effectively killing commercial negotiations for a larger deal with Dassault Aviation.
India's Prime Minister Narendra Modi on Friday announced a plan to buy 36 planes from Dassault through the government-to-government route, after three years of price negotiations for local assembly of the aircraft produced no results.
Defence Minister Manohar Parrikar said Modi's decision came after commercial negotiations went into a "vortex". He stopped short, though, of saying the government had scrapped talks on a contract with Dassault for 126 planes worth up to $20 billion.
"This had to be done to break the vortex," he said, adding that the preferred method was now to talk directly to the French government, rather than return to commercial negotiations.
"Instead of going through the RFP (Request For Proposal bidding process), where there is lot of confusion, chaos, it is now the situation that 36 will be procured ready to fly. What is to be done with the rest will have to be discussed," Parrikar said.
A decision to abandon commercial talks would end what had been touted as one of the world's biggest defence deals and could give hope to rival manufacturers, experts said.
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