On 08 October 2019, the Indian Air Force (IAF) officially took delivery of its first four Dassault Rafale multi-role combat aircraft from Dassault Aviation.
The handover was conducted at Dassault Aviation’s final assembly site for the Rafale in Mérignac, France.
India’s Minister of Defence, Shri Rajnath Singh, the Minister of the Armed Forces of France Florence Parly and Dassault Aviation’s Chairman and Chief Executive Officer Eric Trappier presided over the ceremony.
New Delhi inked the order for 36 Rafale fighters in 2016, following nearly seven years of protracted talks over the Medium Multi-Role Combat Aircraft (MMRCA) program. India opted to end the MMRCA program and instead pushed ahead with an off-the-shelf fighter purchase.
In addition to the 36 aircraft, the $8.85 billion US contract also consisted of a maintenance package (at $2 billion US), customizations (worth $1.9 billion US), and various munitions ($800 million US), including the MBDA Meteor beyond-visual-range air-to-air missile and SCALP air-launched cruise missile.
Moreover, Dassault Aviation also agreed to an offset package valued at 50% of the IAF contract. This was centered on an agreement between Dassault and Reliance Group wherein the two companies will begin producing Rafale and Falcon 2000 components at their jointly-owned Nagpur plant.
The basic idea of an offset package is that the seller will re-invest a portion (50% in this case) of the deal’s value into the buyer’s economy. This arrangement lets India to control its foreign currency outflows and stimulate its local economy in a targeted way. Offsets are an integral part of big-ticket defence contracts to overseas original equipment manufacturers (OEM) selling in India.
In July 2018, six OEMs responded to the India’s new request-for-information (RFI) for a potential program of 114 additional fighters. India’s defence minister Rajnath Singh confirmed that there is no separate plan for additional Rafales, implying that any additional order would have to come through the 114 fighter bid.