The first victim of Airbus Industrie losing out to Boeing on Air-India’s recent Rs 30,000-crore deal may be none other than the much-delayed $1.8-billion deal to acquire French Scorpene submarines.
The government, which was expected to clear the deal earlier this month for the Indian Navy, now seems to have put it off for some more time.
Defence minister Pranab Mukherjee told FE, "There are some problems in the Scorpene deal and we are looking into them."
Sources in the defence ministry said this was an indication that the deal had now been put on backburner due to the recent comments of the French ambassador in India, Dominique Girard, on the Airbus deal.
Another acquisition plan -- of 126 combat aircraft for the Indian Air Force in which the French Mirages are competing -- could also be put on hold, sources said. French company Dassault is a strong contender for the deal.
The Scorpene deal, which has been awaiting clearance from the Cabinet Committee on Security, is getting delayed for almost a couple of years now.
India has been in negotiations with the French company to acquire and jointly develop at the Mazagaon docks six 1,500-tonne Scorpene submarines.
For a year now, the defence ministry has been saying that it is close to clinching the deal estimated at $1.8 billion.
In March, the deal was almost clinched but was put off at the last minute amid indications that a German manufacturer Howaldtshwerke Deutsche Werft (HDW), which was cleared of bribery charges, would now bid for the programme much to the chagrin of the Navy.
"We have waited long, in fact too long," chief of naval staff Admiral Arun Prakash said, when asked about the proposal to acquire the Scorpene submarines. "The proposal is in its very last stages. It has been there for some time," he said.
Last year, the defence ministry headed by George Fernandes also had claimed that it was close to signing the deal.
In 1997, the government had given clearance for both types of new-generation submarines under Project 75. Since then negotiations have been on with the French shipyard DCN, which manufactures Scorpene.