PARIS and NEW DELHI — India has signed a contract for 36 Rafale fighter jets, manufacturer Dassault Aviation said.
"France and India signed today [Sept. 23] the contract for the acquisition of 36 Rafale by India," the company said in a statement. The spokesman for Dassault declined to give financial details.
India's Cabinet Committee on Security — the highest body in the government for the purchase of weapons and equipment, chaired by the prime minister — had cleared the intergovernmental agreement on Sept. 22.
French Defence Minister Jean-Yves Le Drian and his Indian counterpart, Manohar Parrikar, played key roles in forging the deal, Dassault said.
According to a source in the Indian Ministry of Defence (MoD), the order is worth about €7.89 billion (US $8.85 billion). France is expected to invest 30 percent of the total order cost in India's military aeronautics-related research programs and 20 percent into local production of Rafale components to fulfill the mandatory offsets under the deal.
Of the total reported amount, €3.42 billion is for the cost of the platform; another €1.8 billion is for support and infrastructure supplies; €1.7 billion will be spent to meet India-specific changes on the aircraft; €710 million is the additional weapons package; and €353 million is the cost of performance-based logistics support, the MoD official said.
The first of the jets from France is to be delivered in 36 months, by September 2019, and the entire lot over the following 30 months.
Following the signing, Parrikar tweeted: "India & France signed the deal for 36 Rafale jets. Rafale will significantly improve India's strike & defence capabilities."
"This new contract illustrates the strategic relationship and the exemplary partnership maintained between the two countries and marks the natural culmination of the relationship of trust initiated in 1953 when India became Dassault Aviation’s first export customer," the company said.
"Together, Indian and French companies alike, we will endeavor to ensure ambitious industrial cooperation," Dassault Chairman and CEO Eric Trappier said.
According to an Indian Air Force (IAF) official, Dassault will make India-specific changes to the aircraft and mount new-generation missiles, like Meteor and Scalp, adding extra capability beyond India's immediate adversaries.
The Meteor is a beyond-visual-range, air-to-air missile with a range of more than 150 kilometers, whereas Scalp is a long-range, air-launched cruise missile with a range of 300 kilometers.
The Rafale purchase was done with a view to boosting local industry under the Make in India policy pursued by Indian Prime Minister Narendra Modi, Dassault said.
Amit Cowshish, a former MoD financial adviser, said the Rafale order "will not fully meet the requirement of the IAF."
"More aircraft will indeed be required, but it is difficult to say whether the additional requirement will be met by acquiring the same aircraft, except maybe another 18 or thereabouts under the option clause, if such a clause is built into the contract," he said.
Daljit Singh, a retired IAF air marshal and defense analyst, said it would be economical to buy additional Rafale jets because it would "ease logistics support, standardize support equipment — especially when aircraft are required to operate from different dispersed locations — and ensure economy of large numbers. [A] large reserve of manpower and aircrew trained on [the] same type of aircraft would ensure better exploitation."
Under a logistics-support agreement, Dassault will ensure that at least 75 percent of the fleet remains operational or air worthy at any given time. "This would mean at any given time there will be 27 Rafale aircraft ready for operation," an IAF official said, speaking on condition of anonymity.
IAF has not procured any new fighter jets since the start of this century, the last one being the Sukhoi 30-MKI from Russia that was first ordered in the mid-1990s and later produced under license at state-owned Hindustan Aeronautics Limited facilities in India.
The service's fighter aircraft strength is depleting against the required strength of 44 squadrons (one squadron is 18 aircraft). India has 33 squadrons with planes like MiG21s and MiG27s, due to retire in the next 10 years.
"There is an option of repeat clause for 18 Rafale aircraft. Thirty-six is [the] first batch, which could be repeated again. India is short on inventory and more could be ordered," the IAF official said.
Ankur Gupta, a defense analyst with Ernst and Young India, said: "There is obviously a requirement of at least 100 more, but that is a question to be debated sometime later. As of now, this is what we have and we will make do with. Let us not forget the options for 18 more that could be signed anytime over the next three-odd years."
Singh says induction of Rafale in to the IAF would tremendously enhance the IAF operational preparedness and capability as it would have excellent operational availability.
The Rafale acquisition was a government-to-government deal for aircraft that will be built in France following the collapse of lengthy negotiations, which began immediately after Modi announced in April 2015 in Paris his wish to buy the aircraft for IAF in fly-away condition.
However, the negotiations were "arduous" and nearly slipped on "one or two" occasions on issues of price and fulfillment of offsets, but revived with the intervention of the prime minister's office, according to an MoD source.
Pierre Tran reported for this story from Paris, and Vivek Raghuvanshi reported from New Delhi.
Vivek Raghuvanshi is the India correspondent for Defense News.