New Delhi: Indian and France on Friday signed militarily significant deal for the supply of 36 Rafale fighter jets.
The deal was signed by French Defence Minister Jean Yves Le Drian, who arrived in New Delhi late last night to sign the Euro 7.8 billion deal, and Defence Minister Manohar Parrikar.
Deal for 36 Rafale fighter jets between India and France signed. pic.twitter.com/0Gu1YrUMl5
— ANI (@ANI_news) September 23, 2016
As part of the deal, 36 Rafale jets will come equipped with latest missiles and weapon system, giving the Indian Air Force (IAF) a cutting edge over arch rival Pakistan.
Also present during the signing of the deal were the chief executive officers (CEOs) of top French companies, including Dassault Aviation, the makers of Rafale.
The deal comes with a saving of nearly 750 million Euros than the one struck during the previous UPA government, which was scrapped by the Modi government, besides a 50 per cent offset clause.
These combat aircraft, delivery of which will start in 36 months and will be completed in 66 months from the date the contract is inked, come equipped with state-of-the-art missiles like 'Meteor' and 'Scalp' that will give IAF a capability that had been sorely missing in its arsenal.
The features that make the Rafale a strategic weapon in the hands of IAF is its Beyond Visual Range (BVR) Meteor air-to-air missile with a range in excess of 150 km.
Its integration on the Rafale jets will mean IAF can hit targets inside both Pakistan and across the northern and eastern borders while staying within India's territorial boundary.
Pakistan at present only has a BVR with 80 km range. During the Kargil war, India had used a BVR of 50 km range while Pakistan had none.
However, Pakistan later acquired 80-km-range BVR, but now with 'Meteor' the balance of power in the air space has again tilted in India's favour.
'Scalp', a long-range air-to-ground cruise missile with a range in excess of 300 km also gives IAF an edge over its adversaries.
Sources said the "vanilla price" of just the 36 aircraft is about 3.42 billion Euros. The armaments cost about 710 million Euros while Indian specific changes, including integration of Israeli helmet-mounted displays, will cost 1,700 million Euros.
The rest of the cost includes spare parts and maintenance.
The agreement is a major vote of confidence in the Rafale, which had long struggled to find buyers overseas, despite heavy lobbying efforts by the administration of French President Francois Hollande.
Hollande hailed the deal as recognition of France`s aviation industry.
It was first mooted in 2012 but faced major delays and obstacles over the last four years.
India entered exclusive negotiations on buying 126 Rafale jets four years ago, but the number of planes was scaled back in talks over the cost and assembly of the planes in India.
Modi announced on a visit to Paris last year that his government had agreed in principle to buy the jets as India looks to modernise its Soviet-era military.
But it continued to be held back by disagreements such as Delhi`s insistence that arms makers invest a percentage of the value of any major deal in India, known as the offset clause.
Hollande again pushed the deal on a visit to India in January, when he was Modi`s guest for Republic Day celebrations, but officials privately acknowledged that price had become a sticking point.
It is the biggest order for the Rafale after Egypt agreed to buy 24 of the jets in 2015 and Qatar purchased the same amount later that year.
The highly versatile Rafale is currently being used for bombing missions over Syria and Iraq as part of an international campaign against the self-styled Islamic State jihadist group.
It has also been deployed in the past for air strikes in Libya and Afghanistan.