NEW DELHI --- France has offered to invest EUR 1 billion to revive India's combat jet engine project, proposing a joint development plan that could see the stalled 'Kaveri' gas turbine powering indigenous Tejas fighters by 2020.
The proposal is to use offset credits that would come from the planned Rafale fighter jet deal to revive the indigenous jet engine project, people involved in talks between the Indian defence ministry, the Defence Research & Development Organisation and French companies told ET.
Foreign arms companies that sell equipment to India are mandated to invest a portion of the contract cost in the country's defence and aerospace industry. In the case of the Rafale deal, which India and France are negotiating, the offset obligation is 50% of the cost, which would translate to over EUR 3 billion.
Sources said that since January, several rounds of discussions have taken place between Indian authorities and French company Safran, which developed the M88 engine that powers the Rafale as well as the Shakti engine for Indian advanced light helicopters. (end of excerpt)
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