French, Indian leaders report progress on $12bn war jet deal

The leaders of France and India reported good progress on talks to seal a $12-billion fighter jet contract as defence deals dominated the first day of French President Francois Hollande's visit.

Hollande is hoping his two-day trip to India -- his first to Asia since taking office in May -- will push New Delhi to ink the deal to buy 126 Rafale fighter jets from France's Dassault Aviation.

The two sides also concluded long-running talks on a $6-billion pact for short-range surface-to-air missiles to be used by India's military that will be jointly produced by French missile-maker MBDA and Indian weapons developer DRDO.

"Our partnership is based on a number of principles that we strengthened today -- such as defence," Hollande told a joint news conference with Prime Minister Manmohan Singh.

India's premier declared bilateral defence ties were poised to reach a "qualitatively" new level, adding talks on the war jet for which Dassault is the preferred bidder are "progressing well".

Dassault chief executive Eric Trappier, part of a large business delegation accompanying Hollande, told AFP he felt a "realistic optimism" that the Rafale deal could be sealed by the summer.

"The good political and strategic relationship between our two countries can only be a positive thing for the progress of negotiations," he added.

In a welcome showcase for Dassault, the jets have been deployed during the French-led military offensive to drive out Islamists from northern Mali.

India early last year chose the French firm for exclusive negotiations to equip its ageing air force with new fighters, but military analysts have been wary, noting New Delhi has scrapped defence procurement decisions in the past.

Hollande said the large French mission, which includes chiefs of over 60 French businesses and senior government figures such as Foreign Minister Laurent Fabius, was a sign of France's deep-rooted intent to boost relations with India.

"I'm here with this large group of businessmen and elected representatives who believe in this French-Indian partnership -- there is no area, no sector that cannot be covered by our strategic partnership," he told a corporate forum.

Another major project discussed was a $9.3-billion framework contract for France's Areva to build a nuclear power plant in the western state of Maharashtra signed during a visit to India in 2010 by then-president Nicolas Sarkozy.

The plant has run into stiff opposition from environmentalists concerned about seismic activity in the area and safety fears following Japan's Fukushima nuclear disaster but Singh said India remained committed to the project.

"We reiterated our commitment to its early implementation as soon as the commercial and technical negotiations on which have we made quick progress are completed," he said.

Hollande, who was set to travel to India's financial hub Mumbai on Friday, was accompanied by his live-in partner, Valerie Trierweiler, whom India decided should be treated as the president's spouse.

Trierweiler told reporters she wants to become a children's champion as she looks to forge a role for herself as France's first lady .

"I want to focus on children's rights and promote education," she said as she visited a French-run children's home where she met orphans and care workers.

Following the line of Sarkozy, Hollande endorsed India's campaign to become a permanent member of the United Nations Security Council. France is one of the five existing permanent members.

In an editorial on Thursday, The Times of India said France "is arguably India's longest standing all-weather friend, save Russia" but added the relationship was too rooted in trade rather than a partnership of equals.

"This is indeed a good time to move the engagement from one that is still tactical and transactional to one that is more strategic and sustainable," said the paper.

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