Three years of negotiations between France’s Dassault and the contract negotiation committee of the India’s Defense Ministry on the purchase of 126 Rafale fighter jets may be about to collapse. Sources mostly blame the exorbitant price.
According to Business Standard, citing an anonymous source at the
CNC, Dassault’s proposal turned out to be much more expensive
than presented in the commercial bid, making it far from being
the cheapest one, as announced on January 31, 2012.
If true, the reaction of India’s military is expected to deliver
a hard blow to Dassault. The order has already decreased from 310
to 180 due to budget cuts.
This news may also make Cairo the first and only overseas buyer
for Dassault’s Rafale. On Monday, France was announced to sign a
5.2 billion euro deal on export of 24 Rafale fighters to Egypt.
Rafale’s true cost for India turned out to be even higher than
second-placed bid of Eurofighter Typhoon, which costs
approximately €90 million.
“An inexperienced MoD, working off incomplete and sketchy
details provided by Dassault, had incorrectly adjudged the Rafale
cheaper. Now, after three years of obtaining clear figures from
the French, we find India would be paying significantly more than
had been initially calculated,” CNC official told Business Standard.
India’s MoD reportedly explains the confusion as due to an
incorrect assessment of Life-Cycle Cost (LCC), which includes
total expenses of overhaul and maintenance of the fighter during
its 30-40 years in service.
So far, the Indian MoD has not issued any official statement on
the situation with the Rafale contract.
The Dassault Rafale is a French twin-engine, multirole fighter
aircraft. It was first introduced in 2011 for France’s Air Force
France’s Dassault Aviations won the MMRCA contract in 2012. The
original conditions implied production of the initial 18 Rafale
fighter jets in France, with the remaining 108 to be manufactured
at the state-owned Hindustan Aeronautics Ltd. (HAL) facility in
India under a technology transfer agreement. The license for 108
aircraft to be produced in India envisaged that 74 Rafales would
be rolled out in a single-seat version and 34 aircraft would be
In late December 2014, Indian Defense Minister Manohar Parrikar
for the first time admitted that negotiations with Dassault were
India’s Prime Minister Shri Narendra Modi refused to fly in one
of the three Rafale jets that arrived to the Aero India 2015 air
show at Bangalore.
“It is clarified that there is no plan for the Prime Minister
Shri Narendra Modi to fly in any fighter jet. The news item is
incorrect, misconceived and is not based on facts,” stated
the MoD last week thus distancing away from the deal even
India’s Defense Minister has also disillusioned Eurofighter GmbH,
saying that procurement procedures do not allow to reassign the
As the Rafale deal is dying off, Parrikar said the
Russian-designed Sukhoi Su-30MKI fighter jet that have been
produced in India since early 2000 offer a viable alternative.
“The Sukhoi 30 choice is always there. What I mean to say is:
upgrade the Sukhoi 30, make it more capable,” Parrikar said.
The average cost of a Sukhoi Su-30MKI fighter jet is
approximately $56 million.
“The Sukhoi-30MKI is an adequate aircraft for meeting the air
force’s needs,” Parrikar said.
The Su-30MKI fighter was specially developed for India by
Russia’s Sukhoi Design Bureau and 200 aircraft has already
entered IAF service as of August 2014.