In a major development, India and France are believed to have finalised the multi-billion Rafale fighter jets deal. Under the deal India will acquire 36 Rafale fighter jets from Dassault Aviation for EUR 7.8 billion (around Rs 59,000 crore). Defence Minister Manohar Parrikar had recently said that the deal will be finalised soon. The first deliveries are expected to start by 2019 after the deal is officially signed, which is likely to happen in about a month’s time. The deal comes with the clause of delivering 50 per cent offsets, creating business worth at least three billion Euros for smaller Indian companies and creating thousands of new jobs in India through the offsets. In fact, the toughest phase in the negotiations that began in July 2015 – three months after Modi announced in Paris India’s plan to purchase 36 Rafale jets – was to get the French to agree to 50 per cent offsets in the deal. Initially, Dassault Aviation was willing to agree to reinvest only 30 per cent of the value of its contract in Indian entities to meet the offset obligations. The French side finally agreed to invest 50 per cent of the value following a phone conversation between Modi and Hollande late last year. The commercial negotiations, as in the pricing of the planes, equipment and other issues, actually began only in mid-January this year. Under the proposed deal, French companies apart from Dassault Aviation, will provide several aeronautics, electronics and micro-electronics technologies to comply with the offset obligation. Companies like Safran and Thales will join Dassault in providing state-of-art technologies in stealth, radar, thrust vectoring for missiles and materials for electronics and micro-electronics. The announcement of the deal comes at a time when India’s airpower has raised questions on its effectiveness to tackle multi-front war. At present the fighting strength of the Indian Air Force has come down from its mandatory 44 squadrons to 25 which is a grim picture of political inaptitudeness. If replenishment is not done timely the strength would be reduced to just 11 squadrons by 2024. This “widening gap” has occurred primarily due to the rate of retirement of the fighter jet aircraft.
