France and India are pushing ahead with major negotiations over the purchase of 150 advanced Mirage-2000 warplanes for the Indian Air Force, a $2 billion deal that would give India a major source of aircraft other than the Soviet Union and give France's Mirage production lines a new lease on life.
The deal, which Indian officials here say is still being negotiated, would include arrangements for eventual Indian assembly or manufacture of the Mirage-2000, a delta-winged, all-purpose craft designed to become a mainstay of the French Air Force.
The negotiations, which continued here today, underscore the difficulties faced by major world leaders who seek to reconcile broadly stated goals of economic development with the hard realities of military competition and the high profits of arms sales. This is particularly true of President Francois Mitterrand of France, who loudly denounced arms sales to the Third World under his predecessor, and Prime Minister Indira Gandhi of India, who has strongly criticized neighboring Pakistan's plans to buy U.S.-made F16s while at the same time engaging in a multibillion dollar buildup of India's armed forces.
Both Mitterrand and Gandhi are participants in the summit meeting of 22 world leaders currently underway in Cancun, Mexico that is dealing with issues of economic growth for developing countries.
Mitterrand's dilemma is that, while he has called for "revision" of French arms sales policies, the industry signed more than $6 billion in contracts last year with foreign governments. As the world's third-largest arms exporter after the United States and the Soviet Union, France has 75,000 workers employed in the arms industry and another 275,000 jobs depend on it indirectly.
As unemployment heads toward the 2 million mark, the socialist government can ill afford to turn down possibly lucrative contracts that will keep defense workers on the payroll. This is particularly pressing now since Venezuela and Australia, both equipped with earlier Mirage models, recently announced their intention to buy U.S. planes, Venezuela F16s and Australia F18s.
Referring to this clash between ideas and economics during his election campaign last spring, Mitterrrand said: "Tens of thousands of homes and entire regions live from this activity alone. One can regret it. But this is a given fact that limits what we can do and that I must take into account."
Foreign military attaches here say another factor is that, with India the only lively prospect at the moment, the French defense establishment is increasingly eager to strike a deal allowing the Mirage-2000 to be produced in large enough numbers that the French Air Force will be able to buy the craft at a reasonable price.
"They're really getting desperate," said a Third World attache.
The plane's manufacturer, Dassault-Breguet, has been told the French Air Force plans to buy about 300 Mirage-2000s, which are scheduled to begin service in 1983. But the firm, which is about to be nationalized, must sell several hundred more to recover its research and development costs and still charge an acceptable price, the attaches said.
Against this background, the Indian government team here, headed by Defense Secretary P. K. Kaul, has been bargaining hard, despite a reported decision by the Indian defense establishment that the Mirage-2000 fits Indian needs best. Aside from financing -- a major problem-- the talks center on delivery schedules and the possibility of India's building the plane itself, according to Indian and French reports.
In what perhaps reflects an Indian negotiating tactic, press reports from New Delhi have emphasized that the Soviet Union is offering swift delivery of the Mig25 at prices well below those of the Mirage-2000. India is believed already to possess a reconnaissance version of the Mig25, called the Foxbat in Western military terminology.
At the same time, the Indian government is reported reluctant to become lopsidedly dependent on Soviet arms supplies, particularly on top of a recent agreement to buy and manufacture Mig23s to replace its aging fleet of Mig21s.
If the Mirage purchase goes through, however, India is likely to back out of the final part of a three-phase, $1.8 billion deal with British Aerospace, in which New Delhi was to buy 40 Jaguar fighters, assemble 45 more at Bangalore and then manufacture an additional quantity.
Gandhi's government is considering the Mirage-2000 instead, according to reports from New Delhi, because it feels the French plane is more advanced and thus a superior response to the 40 F16s that Washington has agreed to supply to Pakistan over the next 2 1/2 years.
The delivery schedule is particularly important to India, officials said, because Pakistan is to receive its first F16s within the year and Dassault-Breguet has put forward 1984 as its earliest delivery date.