French President Francois Hollande said there will be no news on the sale of Rafale fighter jets to India before the arrival of Prime Minister Narendra Modi on Thursday for a state visit to France.
"There will be no announcement on the Rafale sales before the visit of Prime Minister Modi in France and I do not want the Indian premier's visit to be put in the context of a contract," Hollande told reporters in Paris.
"We are working on it," Hollande added, when asked about the proposed sale of 126 Rafale jets to India.
The French ambassador to India, too, was evasive about the deal while addressing media in New Delhi on Tuesday.
Francois Richier said French companies, including those in the field of defence, are keen to participate in the 'Make in India' programme and the fate of Rafale deal will be a key element in this.
Rafale was selected by India from among five bidders in 2012 since it was the lowest bidder.
Indian government officials say that while the deal was initially for about Rs 42,000 crore, French are seeking a higher price now. This, the Indian officials say, has put the price at a "little more than double the cost".
India is insisting that Dassault Aviation cannot renege on the Request for Proposal (RFP) clauses, which it had initially agreed to.
Even at political level, India has categorically told the French side that it must stick to the RFP, in which Dassault was the lowest bidder and hence was selected for the contract.
"The ball is in France's court," an Indian official had said sometime back.
The French Rafale and European Eurofighter Typhoon were the only two left in the race for 126 fighter plane deal after years of tests on technical and other aspects.
Another point of contention is the guarantee clause under which Rafale has to stand guarantee for the planes that would be manufactured by state-owned HAL.
As per the RFP issued in 2007, the first 18 jets are to be imported and the rest 108 manufactured under licence by Hindustan Aeronautics Ltd (HAL).
According to the sources, Dassault was reluctant to stand guarantee for the 108 fighters to be built by HAL as far as liquidity damages and timelines for production were concerned.
The Indian Defence Ministry is of the view that the guarantee clause was part of the Air Staff Qualitative Requirements (ASQR) under the RFP.
Dassault had agreed to the ASQR and hence was selected for the deal, the sources maintained.
"How can the ASQR be relaxed? This is not allowed under the Defence Procurement Procedure, 2013," the sources said.
However, French authorities insist otherwise.
Talking about the price and guarantee clause, sources said all this takes place within the Indian defence procurement procedure.
"At the conclusion of the competition, the Rafale was selected – and its competitors eliminated – on the basis of technical/operational assessment and on the basis of price," they said.