Ahead of French president Francois Hollande's visit to the capital, India and France are locked in a logjam over the price of nuclear reactors, which could hold up the signing of the commercial agreement for six EPR units in Jaitapur, Maharashtra.
The French attribute advanced safety features in the 1,650-MW third-generation European pressurised reactor - known as EPR - by their nuclear energy major Areva to the high price. They also cite the stringent safety audit practices incorporated after the Fukushima incident to explain the cost increase.
However, Indian sources say there is 20% difference between what France quotes as the minimum price and the maximum price that India can pay. Consequently, both sides are engaged in intense negotiations.
Though the exact figures were not divulged, France's demand for six reactors is expected to be anywhere between Rs. 3,40,000 and Rs. 3,50,000 crore. However, Indian officials say it is too high.
India says that the prices cited are "European" and can be brought down in the Asian context, considering that the price of reactor components sourced from here will be much cheaper. As labour costs are also less in India, the prices should be much less than what the French are asking, it contends.
Hollande will meet PM Manmohan Singh for talks on February 14. The agenda of the meeting will comprise subjects relating to cooperation in energy, defence and space sectors.
The French is also appreciative of Indian help in forums such as the United Nations for their efforts in Mali. In December 2012, India had co-sponsored a French resolution supporting an African Union-ECOWAS military force in Mali at the United Nations.