SOURCE: RAUNAK KUNDE / NEWS BEAT / IDRW.ORG
India is poised to strengthen its air defense capabilities with a potential government-to-government (G2G) deal to acquire 110 Rafale fighter jets from France, as reported by The Print. Negotiations for this multi-billion-dollar contract are expected to commence later this year, marking a significant step in addressing the Indian Air Force’s (IAF) critical shortfall in fighter squadrons.
The deal will also see French aerospace giant Dassault Aviation taking full ownership of Dassault Reliance Aerospace Limited (DRAL), a joint venture with Reliance Aerostructure Limited based in Nagpur, signaling a shift toward greater foreign control over Rafale production in India while committing to sourcing the majority of components from Indian companies.
A senior IAF official, as cited by idrw.org in January 2024, emphasized the need for a G2G deal to avoid the delays associated with open tenders like the Multi-Role Fighter Aircraft (MRFA) program, which has been stalled since its Request for Information (RFI) was issued in 2018. The MRFA tender, intended to procure 114 jets, has seen little progress due to complex transfer of technology (ToT) clauses and competing interests among original equipment manufacturers (OEMs). The IAF’s preference for a G2G deal reflects a pragmatic approach, leveraging the existing infrastructure and training established for the 36 Rafale jets already in service, as well as the Navy’s recent approval for 26 Rafale Marine (Rafale-M) jets for INS Vikrant, cleared by the Cabinet Committee on Security on April 8, 2025, for ?63,000 crore.
A key component of the prospective deal is Dassault Aviation’s move to take full ownership of DRAL, a joint venture established in 2016 with Reliance Aerostructure Limited, a subsidiary of Reliance Defence Limited. Located in Nagpur’s MIHAN Special Economic Zone, DRAL has been producing components for Rafale jets, such as fuselage sections, wings, and parts for the Falcon 2000 business jet series, as part of Dassault’s offset obligations from the 2016 Rafale deal. However, Dassault has long sought complete control of the facility to streamline production and ensure quality, a stance it reiterated in negotiations reported by idrw.org as early as 2022.
Dassault’s insistence on full ownership stems from its past experience during the MRCA negotiations in 2013–14, when it refused to take responsibility for Rafale jets manufactured by Hindustan Aeronautics Limited (HAL). The French company cited concerns over HAL’s ability to meet quality and timeline requirements, a disagreement that ultimately led to the collapse of the MRCA deal. According to idrw.org reports from 2024, Dassault argued that controlling DRAL would allow it to guarantee the quality of Rafale jets produced in India, potentially making the facility viable for export markets as well. The company has claimed it could achieve a production rate of two Rafale jets per month at DRAL, delivering the entire 114 jets envisioned under the MRFA tender within five years—a promise met with skepticism by some analysts due to Dassault’s current production constraints in France, where it produced only 13 Rafales in 2023 against a target of 15.
While Dassault’s takeover of DRAL aligns with its strategic interests, the deal includes a commitment to procure the majority of Rafale components from Indian companies, a move aimed at fulfilling India’s “Make in India” initiative. The 2016 Rafale deal’s offset obligations, which required Dassault to reinvest 50% of the contract value (around €4 billion) into India’s defense sector, involved partnerships with Indian firms like L&T, Mahindra Group, Kalyani Group, and Godrej & Boyce for airframe components, as well as joint ventures like Snecma HAL Aerospace Ltd for aero-engine parts. The new deal is expected to expand this ecosystem, with DRAL serving as a hub for local sourcing and assembly.
However, the Indian Ministry of Defence (MoD) has expressed skepticism about Dassault’s ability to meet the mandated 70–75% local sourcing requirement, as reported by idrw.org in August 2024. The MoD fears that DRAL could become a mere assembly plant reliant on kits from France, with limited technology transfer to the broader Indian defense sector. The Rafale comprises over 40,000 components, making it challenging to ensure local sourcing for each part. Critics argue that granting Dassault full ownership of DRAL could channel ToT funds primarily to Dassault and its private sector partners, potentially sidelining state-owned entities like HAL, which has been pushing for a central role in the MRFA program.
The potential acquisition of 110 Rafale jets would make India one of the largest operators of the Rafale globally, with a projected fleet of 172 jets (including the 36 IAF Rafales and 26 Rafale-M jets for the Navy), surpassing the French Navy’s 46 Rafale-Ms and nearing the French Air Force’s 185 Rafales, as forecasted by Dassault in a September 2024 idrw.org report. This expansion would enhance India’s deterrence capabilities against China, which operates the J-20 stealth fighter and is developing sixth-generation prototypes, and Pakistan, which may acquire China’s J-35 stealth jets in the coming years.
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