France says talks on Dassault's $23bn India Rafale deal are advancing
A file photograph of a Rafale jet fighter on the assembly line in the factory of aircraft manufacturer Dassault.Reuters

Talks on the stalled sale of 126 Rafale combat jets to the Indian Air Force are advancing, a French defence ministry spokesman said during a visit to India by Defence Minister Jean-Yves Le Drian.

"Things are advancing, but we will make an announcement when the contract is concluded and not before," the spokesman told Reuters.

Pursued by the news agency, Indian defence ministry officials could not be immediately reached for comment.

Earlier, news channel NDTV reported that the deal with France's Dassault Aviation could be salvaged ahead of Indian Prime Minister Narendra Modi's visit to France in April.

The Business Standard reported earlier in February that contract talks were "effectively dead", but the sale of 24 jets to Egypt had reignited Dassault's hopes of closing more negotiations.

France and India have been discussing the contract, potentially worth up to $23bn (£14.8bn, €20.3bn), for more than three years now.

The Rafale deal has reportedly hit two hurdles - the assembly of aircraft in India and price negotiations - threatening to derail one of the world's biggest defence deals.

Bone of contention

India wants Dassault to take full responsibility for the production of 108 jets at a state-run facility in Bangalore, under the 2012 bid offer.

France has said it will help Hindustan Aeronautics (HAL) stick to delivery schedules but it cannot give guarantees for production of the aircraft built at a facility over which it has no control.

France said in December 2014 that its bid to supply the Rafale fighters to India will require more negotiations between Paris and New Delhi.

In November 2014, Dassault Aviation chief executive Eric Trappier said a contract by the end of March was a "reasonable goal".

New Delhi picked the Rafale fighters over the Eurofighter Typhoon fighter, made by EADS and financed by a four-nation consortium that includes Britain, Germany, Spain and Italy for the Indian Airforce in 2012.

Dassault also beat US bidders Boeing and Lockheed Martin, Sweden's Saab and the Russian makers of the MiG-35. Rafale has a naval variant that could interest the Indian military in the future.