Hollande starts India visit, says jet deal will take time

A senior French official acknowledges negotiations are still snagged on the price

CHANDIGARH, INDIA: France's President Francois Hollande played down the prospect of a swift conclusion to a drawn-out deal for New Delhi to buy 36 French jet fighters as he began a three-day visit to India Sunday.

The invitation for Hollande to be chief guest at India's Republic Day military parade on Tuesday had raised expectations that the multi-billion dollar agreement for the Rafale jets would finally be sealed.

But after landing in the northern city of Chandigarh, Hollande cooled talk that the contract was on the verge of being signed. He said further discussions were needed on a prior inter-governmental agreement.



"We are going to take another step on the road which we hope will lead us to India's acquisition of the 36 Rafale jets," Hollande told reporters.

"India needs them and France has shown that it has the world's best aircraft.

"The commercial contract can only come after the inter-governmental accord... which will be discussed during my visit."

While Hollande said he was "optimistic" about the inter-governmental accord being agreed on Monday, a senior French official acknowledged negotiations were still snagged on the price.

And in an interview with the Press Trust of India news agency, the French president said that "agreeing on the technicalities of this arrangement obviously takes time".

Prime Minister Narendra Modi announced in Paris last year that his government had agreed to buy the jets as India looks to modernise its Soviet-era military and keep up with neighbouring Pakistan and China.



The two leaders stepped into the long-delayed deal after tortuous negotiations over a much-larger agreement first signed with France's Dassault Aviation in 2012 broke down.

A sticking point has been Delhi's insistence that arms makers invest a percentage of the value of any major deal in India, known as the offset clause.

Hollande began his second official visit to India in Chandigarh, which was designed by French architect Le Corbusier more than 60 years ago.

After Modi greeted Hollande with a hug, the two leaders strolled through Chandigarh's renowned rock garden, with its sculptures made out of rubble from the city's construction, before heading to an archaeological museum.

Ministers and business executives travelling with Hollande meanwhile signed a series of accords with their Indian counterparts on issues such as e-commerce, renewable energy and the development of "smart cities" which is one of Modi's pet projects.

On Monday the leaders are expected to announce a roadmap for building six French nuclear reactors in the western state of Maharashtra, more than five years after a bilateral civil nuclear cooperation agreement was signed, according to the Times of India newspaper.

They will also lay a foundation stone at the new headquarters of the International Solar Alliance, a 121-nation group launched by Modi at the Paris COP21 conference in November, to expand affordable solar power.

Hollande said he hoped some of the French businesses travelling with him would be at the forefront of the solar energy push.

"We are going to translate our shared commitment to implement what was agreed in Paris into action by launching the solar alliance here," he said at Chadigarh's military airport.

Security will be high on the agenda after deadly Islamist attacks in Paris in November that evoked memories of the 2008 Mumbai attacks, which left 166 people dead.

India launched a nationwide security crackdown in the lead-up to Republic Day, arresting a string of suspected Islamic militants.

Security was tight for Hollande's arrival, with armed police and paramilitary forces patrolling the streets of Chandigarh.

Hollande and Modi are expected to sit side by side to watch Tuesday's pomp-filled spectacle of military might -- which includes columns of soldiers and Soviet-era tanks -- along Delhi's central Rajpath avenue.

The parade is the highlight of annual celebrations of the birth of modern India. US President Barack Obama was last year's chief guest.