India has finally cleared the decks for the acquisition of 36 Rafale aircraft for the Indian Air Force (IAF) in a deal that is said to be in India's favour. The agreement will boost its air squadron strength while adding enough air power to give it an edge over Pakistan.
The Cabinet Committee on Security (CCS) chaired by PM Narendra Modi cleared the deal on Wednesday amid rising tensions over Pakistan's support to Kashmir and terrorism, defence ministry sources were quoted as saying by major news outlets.
The deal would cost India €7.8 billion (over Rs 59,000 crore), which is comparatively lower than its earlier price of €12 billion. The long-drawn negotiation with France took 17 months to come to its logical conclusion.
This deal is tailored to give India a clear edge over Pakistan as it is inclusive of a weapons package featuring 150km range Meteor missile and an advanced beyond-visual-range air-to-air missile (BVRAAM).
The Meteor missile is said to be three times greater than any of the conventionally powered missile in a head-on engagement. Its lethality is said to be five times that of the American AMRAAM missile. Pakistan does not have anything similar to this in its arsenal, reports noted.
Moreover, the deal also includes the supplies and logistics, with reports stating that the French side has assured of a performance-based logistics support, where at any given time, 75 percent of the Rafale fleet will be airworthy. This is in contrast to India's frontline aircraft, Su-30MKI, where only 50 percent of the fleet is airworthy.
With the draft of the Inter-Governmental Agreement (IGA) now ready, the government will await the arrival of French Defence Minister Jean-Yves Le Drian on Thursday night. Indian Defence Minister Manohar Parrikar and his French counterpart will ink the IGA and all the associated commercial protocols on September 23.
This deal is significant as it is the first major combat aircraft acquisition deal in two decades, since India signed a deal with Russia for the Sukhoi Su-30MKIs in 1996.
The deal, which was announced by Prime Minister Narendra Modi during his visit to Paris in April last year, is for an aircraft first mooted by the IAF nearly 16 years ago.
This deal will also represent PM Modi's commitment to the country when he announced India's intention to buy 36 Rafales directly from France in a government-to-government deal in April 2015.
The government went for 36 Rafales citing "critical operational necessity" and need to cut time and cost, when it scrapped the $20 billion MMRCA (medium multi-role combat aircraft) project to acquire 126 Rafale fighters in 2015.
"All 36 jets will be delivered in 66 months. India will pay around 15% (around Rs 9,000 crore) as the first instalment," the Times of India quoted a source as saying.
The Rafale combat aircraft is a twin-engine, canard delta wing, multirole fighter aircraft that has over 3,700km range and features an aerial refuelling probe, 14 hardpoints for the Air Force versions.
When French President Francois Hollande came to New Delhi as the chief guest for 2016 Republic Day parade, he had offered a deal of €8.6 billion, according to the Economic Times. But India was negotiating for a further cut in the cost.
The deal will come with 50 percent offsets clause, where France will have to invest back in India. It is also expected to create business worth at least €3 billion for Indian companies.
There have been reports of the French reviving the Kaveri engine project by investing €1 billion and Rafale maker Dassult partnering with private Indian company to manufacture structural parts for its Falcon executive jets.