French President Nicolas Sarkozy has thrown his weight behind the drive to sell as many as 60 Rafales to the Emirates, which has a history of buying French combat aircraft, and 14-28 to Kuwait, which traditionally buys U.S. jets.
But the omens aren't good for Rafale. Although the Emirates has a history of buying French combat jets, Dassault's failure to find any foreign takers for the aircraft hasn't encouraged the Persian Gulf state to acquire the Rafale.
Kuwait traditionally buys U.S. aircraft and is looking for new generation combat jets.
The Rafale completed 15 hours of flight tests in Kuwait in mid-July and is undergoing another 20 hours to assess its suitability for desert warfare.
But there is stiff opposition in parliament, which has been highly critical of weapons systems purchased earlier by the government, to buying the supersonic Rafale.
Discussions with France began in February 2008 for the Rafale in a deal worth an estimated $4.4. billion, with competition from Sweden's Saab Gripen and Boeing's F/A-18.
But opposition lawmakers aren't happy with that on technical grounds. Some insist the proposed deal is "suspicious." In the past, parliament torpedoed arms deals because of alleged kickbacks to senior officials.
The Financial Times noted that Sarkozy, who jets around the world promoting French weapons systems, has a "tendency of jumping the gun.
"He clearly finds it difficult to resist announcing to the world that he has finally pulled off a significant export sale for the Rafale even before the contract is signed and delivered."
In 2009 he boasted that France had clinched a deal to sell Brazil 36 of the jets, with a potential final order of 100. But a year later, it looks increasingly likely the Brazilians will opt for Sweden's Gripen rather than the more expensive Rafale.
A few weeks ago, Sarkozy announced the Emirates was considering replacing its older 63 Mirage 2009 jets, also built by Dassault, with the Rafale. But the Emirates indicated earlier this month it was eyeing Boeing's F/A-18 Super Hornet as an alternative.
Abu Dhabi, which conducts the Emirates' military procurement, complicated things for the French in February by demanding the Rafale be armed with Boeing's SLAM ER/2 missile instead of the European-made MBDA AM-39 they are designed to carry.
The Emirates' military wants missile capable of striking deep inside Iran. The SLAM has a range of up to 160 miles, while the AM-39, a version of the French Exocet anti-ship missile, has a limit of 65 miles.
France has also notably lost out on export orders to Singapore, Morocco and South Korea, which both selected Boeing's F-15 Eagle, which has been operating for years and recently underwent extensive upgrading.
Security export deals for the Rafale are crucial now for Dassault and the French air force and navy, which are expected to order 294 of the jets.
But in the absence of foreign sales Dassault will find it increasingly difficult to maintain the production line for the French forces.
The French Defense Ministry recently decided to order 11 additional Rafales in 2011, earlier than scheduled, just to keep the production line running even though it will cost the taxpayer an extra $1.1 billion.
At the same time, the United States has sharply boosted its military exports through massive arms sales to the gulf states to counter Iran, thereby maintaining hefty orders for defense contractors as the U.S. military budget shrinks amid economic woes.
The Financial Times noted, too, that Russia has also stepped up its military exports to keep its once powerful defense industry going and has overtaken France as the third largest arms exporter after the United States and Britain.
The Europeans, the Financial Times added, cause problems for themselves by constantly fielding three jets, the Eurofighter Typhoon, Saab's Gripen and France's Rafale, which plays into the hands of the Americans and Russians.
"Until the Europeans finally decide to consolidate their combat aircraft industry, they can only continue to lose altitude," the Financial Times warned.
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