A global Request for Proposal (RFP) for 126 Medium Multi Role Combat Aircraft (MMRCA) for Indian Air Force was floated in 2007. An offset clause of 50 percent was built into this RFP. However, on 10 April 2015, owing to the critical holding of Fighter Squadrons in the Indian Air Force, Prime Minister Narendra Modi announced direct purchase of 36 Rafale Fighter Jets in a fly-away condition as a Government to Government (G2G) deal with France bypassing the laid down RFP route. The announcement by the Prime Minister was a general direction for the way forward and the fine print of the agreement was to be worked out at the appropriate level by both sides.
The above announcement was followed up by negotiations between the two governments to reach mutually acceptable terms and conditions for the final agreement. In one such recent negotiation, the French Government has reportedly rejected India’s insistence for a 50 percent offset clause citing sharp cost escalation, and instead offered to participate in ‘Make in India’ projects to carry forward the talks for 36 Rafale fighters. There are indications that France has offered to manufacture Falcon business jets or Rafale Fighter Jets in India as part of this proposal.
The above announcement was followed up by negotiations between the two governments to reach mutually acceptable terms and conditions for the final agreement. In one such recent negotiation, the French Government has reportedly rejected India’s insistence for a 50 percent offset clause citing sharp cost escalation, and instead offered to participate in ‘Make in India’ projects to carry forward the talks for 36 Rafale fighters. There are indications that France has offered to manufacture Falcon business jets or Rafale Fighter Jets in India as part of this proposal.