France and the United Arab Emirates have revived plans to jointly develop an upgraded Rafale fighter jet after talks stumbled earlier this year, officials said, giving Paris a fresh opportunity to advance its flagship defence programme.Paris, which has military bases in the UAE, has been deemed especially reliable by Abu Dhabi during the current conflict in the Gulf after sending air defence systems to the country. (Representative Image: REUTERS)The project, for which France's 2027 draft budget earmarks €3 billion ($3.36 billion), has returned to the top of the agenda after plans for France and Germany to jointly develop a next-generation fighter aircraft collapsed earlier this year.France's President Emmanuel Macron travelled to the region this week and agreed with UAE President Sheikh Mohammed bin Zayed al-Nahyan to deepen a strategic defence agreement between the two countries.UAE, FRANCE HAVE CLOSE STRATEGIC TIESThe UAE is France's biggest customer of the Rafale warplane, which is built by Dassault Aviation.Paris, which has military bases in the UAE, has been deemed especially reliable by Abu Dhabi during the current conflict in the Gulf after sending air defence systems to the country and shooting down drones from Iran with its warplanes."This trip enabled us to strengthen the defence relationship with the United Arab Emirates, where an important agreement was signed ... to establish a common strategy for the Rafale's fifth generation," Macron told reporters on Wednesday.Two people familiar with the matter said the focus would now turn to the cost and technical details of the programme during talks that will take place between the industrial players.Prior to the project stalling, La Tribune newspaper reported in April that its costs had reached €5 billion, with the UAE expected to fund roughly two-thirds.Also read: Kashi to witness IAF’s might in the skies from ThursdayBUDGET SQUEEZE MAKES EMIRATI DEAL VITALWhile Macron has pledged to accelerate rearmament in response to a more volatile security environment, officials face growing scrutiny over how to fund costly long-term programmes at a time of large budget deficits and rising debt.The budget squeeze has added importance to the Rafale F5 programme — also called F5 standard — which aims to give the fighter a mid-life upgrade and is seen as a cornerstone of France's future air combat capabilities.The upgrade is expected to integrate new connectivity and advanced weapons, helping maintain the aircraft's relevance well into the 2040s and serving as a bridge to future European combat aviation projects.Securing external partners and financing for the programme eases pressure on France's defence budget while preserving critical industrial and technological capabilities.Under the terms of any deal, the UAE is likely to demand some technology transfers or for parts of the production to be moved to its own territory.Read also: Watch: India's Tejas, French Rafale, US' F-35 and Russian-made Sukhoi fly together at Tarang ShaktiAnalysts say that in the past this has created tensions with supplier nations and their defence industries, which have been reluctant to share strategic know-how or to move production abroad.A senior French official said there was a firm commitment from Abu Dhabi to work with France now, and Dassault was working with Emirati defence conglomerate EDGE Group.Dassault declined to comment on the agreement.Olivier Andries, chief executive of Safran, which manufactures the Rafale's engines, said on Friday that the agreement was "very good news".In a call with reporters, he declined to say which technology or production transfers would be considered as part of the deal.EDGE and Safran already cooperate on several areas including defence electronics and smart weapons.($1 = 0.8929 euros)Also read: Ukraine to buy Rafale jets, air defence systems under France deal