India, France conclude Rafale deal

India and France on Friday concluded an Inter-Governmental Agreement for the purchase of 36 Rafale fighter jets to cost the nation Euro 7.87 billion, The Hindu reported.

The signing was concluded at Hyderabad house in the presence of Defense minister Manohar Parrikar along with his French counterpart Jean Yves Le Drian.

“I am certain that the Rafale and its performance will hold high the colors of the Indian Air Force. It will demonstrate unstinting efficiency in protecting the people of India and the sovereignty of the world’s largest democracy,” Eric Trappier, Dassault Aviation Chairman and CEO who was present at the event said in a statement later.

India and France held several rounds of tough negotiations after Prime Minister Narendra Modi announced the decision for direct purchase of 36 Rafale jets in fly away condition in April 2014.

The deal includes the 36 aircraft, weapons, spares, support and maintenance and the jet will be customized as per the requirements of the IAF.

Deliveries are expected to begin 36 months from signing of the contract and completed in 30 months from then.

Under the terms of the contract, France has to ensure that 75 percent of the fleet i.e. 27 fighters are operationally available at any given time.

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.

Like all defense deals, this deal too has a 50 percent optional clause under which India can procure 18 more jets at the same price but the government has far stated that they would not order beyond 36.

Rafale was originally selected under the Medium Multi-Role Combat Aircraft (MMRCA) for 126 which began in 2007. But as the final price negotiations got too complicated, Modi government decided to go for a direct deal.

While Rafale deal has seen a closure, the government is already scouting for another fighter het to be built in India under technology transfer, virtually reopening the original MMRCA contest.