India in September 2016 inked a direct deal with the French government to purchase 36 new Rafale fighter jets in a 7.87 billion euro deal that is likely to bring major work to the Indian private sector in terms of offsets under the make in India policy.
The Rafale deal for 36 jets includes over 3 billion euros of work for the Indian industry over the next 7-8 years according to top defence ministry officials. "This has a huge potential to develop direct and indirect employment opportunities in India," the official said. Besides high end technology like engine know-how, major structural assembly is also likely in India, besides a chunk of avionics work.
India will also get latest weapons like the Meteor and Scalp missiles as part of the contract, besides a 5 year support package that assures high availability of the fighter. India will pay a 15 % advance and deliveries are to start in three years.
The deal was inked after negotiations that last close to 18 months, with Indian negotiators finally bringing down the price by 328 million euros.
In November 2017, Congress alleged a 'huge scam’ in Rafale fighter jets deal. Saying that the contract violated the procurement procedure, the Congress party blamed the government for promoting of 'crony capitalist friends’ at the cost of a defence public sector unit, Hindustan Aeronautics Limited
Congress alleged that the deal signed with France does not cater for technology transfer and has caused an 'insurmountable' loss to the exchequer. The Rafale deal has a 50 percent offset clause, a large part of which is to be executed by a joint venture company of the Anil Ambani owned Reliance Defence.
India Specific Enhancements
The Rafale deal caters to specific Indian air force needs. The fighter jet will be modified by France to meet the following:
BEST Vs LATEST
The Rafale will be India's most capable fighter aircraft. These, according to defence ministry officials, are the major capability differences it will make compared to the current best - the Su-30MKI.
WEAPONS: India has managed to negotiate the acquisition of the latest weapons package for the Rafale. These are the new weapons, beyond the standard package.
SCALP: a precision long range ground attack missile that can take out targets with extreme accuracy. Has a range of 300 km, capped by the missile technology control regime.
METEOR: a beyond visual range air to air missile that is possibly the best in its class. Can take out enemy aircraft at range of over 100 km.