India, France ink €7.87 billion agreement for 36 Rafales


India, France ink €7.87 billion agreement for 36 Rafales [IR, Defence]

  • India concluded an Inter-Governmental Agreement (IGA) with France for the purchase of 36 Rafale fighter jets at a cost of €7.87 billion, the first fighter aircraft deal since the purchase of Sukhois from Russia in the late 90’s.
  • The deal comes after 17 months of tough negotiations since Prime Minister Narendra Modi announced the decision in April 2015 for direct purchase of the jets in fly-away condition, citing “critical operational necessity” of the IAF.
  • The Rafale is a twin-engine, multi-role fighter aircraft.
  • It is capable of carrying out all combat missions: air defence, interception, ground support, in-depth strikes, reconnaissance, anti-ship strikes and nuclear deterrence.
  • The last part is of particular interest to India and these aircraft are likely to succeed Mirage fighters for nuclear warhead delivery as part of India’s nuclear doctrine.
  • The weapons package includes Meteor radar guided Beyond Visual Range (BVR) missile considered the best in the class with range of over 150 km and Scalp long range air to ground missiles.
  • The deal includes the aircraft in fly-away condition, weapons, simulators, spares, maintenance, and Performance Based Logistics support for five years.
  • Warranty is extendable by two years by factoring inflation and further by another five years upon negotiation. For the entire deal inflation has been capped at a maximum of 3.5 % or current rate whichever is lowest.
  • Aircraft will be customised as per requirements of the IAF which include Helmet Mounted Displays, radar warning receiver, infrared search & track among others.
  • Unlike the practice in defence deals, this deal does not have an optional clause. Under optional clause another 50 percent of the contract additional units can be procured at the same price after conclusion of the main contract.
  • There is a 50 percent offset clause under which French industry will invest half the contract value back in the country which is expected to develop some expertise domestically in the aerospace sector.
  • There is also a six percent technology sharing component, which is being discussed with the Defence Research and Development Organisation (DRDO).