The Government has cleared the much anticipated deal with France for 36 Rafale fighter jets which will cost £7.878 billion and will be signed on Friday in the presence of French Defence Minister Jean Yves le Drian.
Defence sources said that deal for the aircraft, the first fighter jet deal in 20 years, comes with a saving of nearly £750 million than the UPA era one, which was scrapped by the Narendra Modi Government, besides a 50 per cent offset clause.
This means business worth at least £3 billion for Indian companies, both big and small, and generating hundreds of jobs in India through offsets.
The Rafale fighter jets, deliveries of which will start in 36 months and finished in 66 months from the date contract is inked, comes equipped with state-of-the-art missiles like Meteor and Scalp that will give the IAF a capability that had been sorely missing in its arsenal.
Sources said the Government on Wednesday formally cleared the Inter Governmental Agreement to be signed on Friday in the presence of Drian who arrives Thursday evening along with CEOs of Dassault Aviation, Thales and MBDA and top Government officials.
The contract for the deal was already cleared by the Cabinet Committee on Security earlier. The price of the contract was fixed in May, sources said.
Sources said the “vanila price” (just the 36 aircraft) is about £3.42 billion. The armaments cost about £710 million while Indian specific changes, including integration of Israeli helmet mounted displays, will cost £1,700 million.
Rest of the cost include spare parts, maintenance among others.
Besides other features that make the Rafale a strategic weapon in the hands of the IAF is the Beyond Visual Range Meteor air-to-air missile with a range in excess of 150 KM.
Its integration on the Rafale jets will mean the IAF can hit targets inside both Pakistan and across the northern and eastern borders while still staying within India’s own territorial boundary.