Sixteen months after Prime Minister Narendra Modi announced the deal to buy 36 Rafale fighter aircraft, the Cabinet Committee on Security (CCS) is set to approve on Monday the closure of negotiations between the defence ministry and French manufacturer Dassault Aviation. The settled price for the twin-engined multi-role fighter is about 7.8 billion Euros with deliveries from 2019 and annual inflation capped at 3.5%.
Top sources told Hindustan Times that the defence ministry has sent the finalised deal to the CCS after making requisite changes to its offset section. The deal involves the manufacturer outsourcing 50% of the total amount of the deal from India.
“The cost of 36 fighters will be around Rs 7000-8,000 crore lower than that what was being offered to the previous UPA regime in the now cancelled contract for multi-role medium range combat aircraft (MMRCA). Rafale had been shortlisted as the lowest bidder in the MMRCA tender,” said a senior official.
Since Modi ordered 36 ready-to-fly fighters from France in April 2015, both the defence ministry and Dassault Aviation officials have been involved in hectic negotiations with defence minister Manohar Parrikar insistent that the cost should be 10-20% less than what was being offered to UPA regime but without compromising on the capabilities of the aircraft.
Equipped with a state-of-the-art AESA radar that allows for multiple targeting beyond visual range, the nuclear capable jet will the frontline jet for Indian Air Force (IAF) with Russian Su-30 MKI forming the backbone. Rafale fighters can be armed with the latest air-to-air, air-to-ground, as well as nuclear armament.
The 36 aircraft with a full armament complement were offered at a maximum price of 11.6 billion euros with annual inflation pegged at 5%. This has been brought down to 7.8 billion euros with maximum inflation pegged at 3.5.