France submits final Rafale proposal as India moves closer to Rs 3.25 lakh crore deal

New Delhi: India's plan to acquire 114 Rafale fighter jets for the Indian Air Force has moved a step closer, with France submitting detailed technical and commercial proposals that will pave the way for final negotiations before the contract is signed.

The proposals were submitted in response to a Letter of Request issued by India in May, people familiar with the matter said. The estimated ₹3.25 lakh crore deal is being processed through the government-to-government route and will include sovereign guarantees and technology transfer.

Under the proposal, 94 Rafale jets will be manufactured in India by Dassault Aviation in partnership with local companies. India plans to establish a full-fledged fighter aircraft production line, with indigenous content expected to rise to at least 50% over time.

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To meet the IAF's immediate operational requirements, 20 aircraft will be delivered in flyaway condition from France. These will add to the 36 Rafale fighters already in service with the Air Force and the 26 naval variants ordered by the Indian Navy. The navy could also acquire more than 30 additional Rafale jets for operations from its aircraft carriers as its older generation MiG-29K fleet approaches retirement.

The project will mark the first time Rafale fighter jets are produced outside France with technology transfer. Dassault will lead localisation, supported by other French companies, including Safran, which manufactures the engines; Thales, which supplies the avionics; and MBDA, which provides the weapons systems.

Indian companies, including Tata Advanced Systems Ltd, which has an agreement with Dassault to manufacture the aircraft's fuselage and other major components, are expected to secure a significant share of the work once the contract is signed.

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The aim is to sign the agreement within this financial year, the people said. Several rounds of negotiations to finalise technology commitments and pricing are expected to begin by the end of August or early September.

After the defence ministry accepts the final offer, the proposal will be sent to the Cabinet Committee on Security for approval. A formal Letter of Acceptance will then be issued to France, completing the procurement process.