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India to soon get 36 Rafale jets at Rs 59,000 cr; details fixed, IGA being finalised

India’s plan to own Rafale fighters will soon turn into reality with all details of the much anticipated contract for 36 jets finalised.

India TV Business Desk New Delhi Published on: September 14, 2016 20:30 IST
Rafale jet manufactured by Dassault Aviation
Rafale jet manufactured by Dassault Aviation

India’s plan to own Rafale fighters will soon turn into reality with all details of the much anticipated contract for 36 jets finalised and work is now on for the Inter Governmental Agreement for the deal, sources in the government said today. 

The deal is likely to be sealed soon as both the countries have finalised the cost, offsets and service details for the deal which will cost New Delhi about Euro 7.87 billion (Rs 59087.96 crore) for the 36 fighter jets in fly away conditions.  

A "working team" from France is already in town with their own translators and are going through the contract, running into several thousand pages, with their Indian counterparts. 

The sources said that once the IGA is firmed up, the document will go back to the Cabinet Committee on Security for a final clearance. 

They said that India has been able to save over Euro 590 million through tough price negotiations which began in January this year. 

Though the deal could have been firmed up earlier, issues like pricing and offsets took time as India wanted a better contract. 

Following intervention by Prime Minister Modi late last year, France agreed for a 50 per cent offset clause. 

This means creating business worth at least three billion Euros for Indian companies, both big and small, and generating thousands of jobs in India through offsets. 

A high-level delegation from France could come down for the formal signing of the contract, French sources said. 

The delivery for the fighter aircraft is expected to begin in 2019, with an annual inflation capped at 3.5 per cent. 

Last month, a report submitted by a team negotiating the much-anticipated Rafale deal with France was cleared by the defence ministry. The file was then sent to the Prime Ministers office for review and clearance. 

Sources said the PMO had sought from Defence Ministry some clarifications on the life cycle costs and unit price of the aircraft which was replied to. 

During his visit to France in April last year, Prime Minister Narendra Modi had announced that India would purchase 36 Rafale jets in a government-to-government contract. 

Soon after the announcement, the defence ministry scrapped a separate process that was on to purchase 126 Rafale fighter planes, built by French defence giant Dassault Aviation. 

The weapon systems, part of the deal, will also include the new-age, beyond visual range missile 'Meteor', and Israeli helmet mounted display. 

The price of the deal was brought down from nearly 10 billion euros, as sought initially, due to various reasons including tough negotiation by India, the discount offered by the French government and reworking of some of the criteria. 

It is not clear if the price has been brought down further, but India has been keen on it.

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