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India reveals cost of Rafale procurement

13 March 2018
The Indian government has disclosed that its procurement of the Rafale is approximately USD8 billion. Source: IHS Markit/Patrick Allen

The Indian government has revealed the unit cost of the Dassault Rafale fighter aircraft it has agreed to procure from France. The disclosure in the Indian parliament by Minister of State for Defence Subhash Bhamre on 12 March follows allegations raised by the political opposition in India that the procurement lacked transparency.

Bhamre said that the unit cost of the aircraft is INR6.7 billion (USD103.12 million). However, he noted that this does not include the costs for India-specific modifications, weapons, and other undefined services. The total stated cost of the programme – agreed under an India-France government deal announced in 2016 – is about USD8 billion.

In his parliamentary reply, Bhamre also compared the cost of the Rafale programme to the previously quoted price of USD10.2 billion for 126 Rafales under the scrapped Medium Multi-Role Combat Aircraft (MMRCA) competition. Bhamre said the cost of the terminated MMRCA programme did not include technology transfers under offset.

Bhamre said, “The inter-governmental agreement (IGA) for [the] supply of 36 Rafale aircraft envisages [the] supply of aircraft in a fly-away condition along with associated equipment. The earlier proposal in the procurement of 126 aircraft involved licensed manufacturing only and not transfers of technology. It [the MMRCA procurement] was never finalised.”

Making reference to the agreement to procure 36 Rafales, he added, “The cost of each Rafale aircraft is approximately INR670 crore [or INR6.7 billion] at the prevailing exchange rate of November 2016, without associated equipment, weapons, India-specific enhancements, maintenance support, and services.”

In another parliamentary reply, Bhamre gave additional details about Dassault’s offset obligations in the procurement of 36 Rafales under the IGA.

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