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A critical plan to strengthen the Indian Air Force (IAF) with 114 new Multi-Role Fighter Aircraft (MRFA) has become a textbook case of how procedural delays in defence procurement can cause costs to spiral, creating a significant financial burden for the nation.
The tender, which began in 2007 with an estimated cost of ₹42,000 crore ($10.4 billion) for 126 jets, has now reportedly ballooned to nearly ₹2,00,000 crore ($24.5 billion) for a smaller order of 114 aircraft in 2025.
This near five-fold increase has sparked serious debate within the defence community about the program's viability and the steep price of indecision.
A Timeline of Soaring Costs
The financial journey of the fighter jet acquisition highlights the severe impact of prolonged delays. The process, which started nearly two decades ago, has seen costs escalate due to inflation, global market dynamics, and evolving technological requirements.- 2007: The original Medium Multi-Role Combat Aircraft (MMRCA) tender was issued for 126 jets at an estimated ₹42,000 crore. The goal was to replace the IAF's aging Soviet-era MiG-21 fleet. After rigorous trials, the Dassault Rafale from France was selected as the winner.
- 2015: After years of unsuccessful negotiations over cost and local production guarantees with Dassault Aviation, the 126-jet tender was officially cancelled.
- 2024: The requirement was revived under the new MRFA label for 114 jets, with the estimated cost climbing to ₹1,25,000 crore ($15.3 billion) due to inflation and the inclusion of more advanced technology.
- 2025: The reported cost has now surged to a staggering ₹2,00,000 crore ($24.5 billion). This escalation pushes the per-aircraft cost to approximately $215 million, a figure comparable to what other nations have recently paid. For instance, the UAE purchased 80 Rafales in 2021 for about $225 million per plane, while Indonesia secured 42 Rafales in 2022 for roughly $193 million each, underscoring the high price India now faces.
The High Price of Indecisiveness
The massive cost overrun is a direct result of years of indecision by successive governments. The initial goal in 2007 was a swift acquisition to maintain a strategic edge over regional adversaries.However, the process was plagued by bureaucratic obstacles and political debate. The collapse of the original deal in 2015 led to an emergency off-the-shelf purchase of just 36 Rafales in 2016 for €7.8 billion ($8.7 billion) to address the IAF's most urgent needs, but this did not resolve the larger fleet shortage.
This delay has created a critical capability gap. As older aircraft like the MiG-21 and MiG-27 are phased out, the IAF's squadron strength has fallen to around 31, significantly below the sanctioned strength of 42 required to manage a two-front threat.
In 2012, when the original Rafale deal was deemed too expensive, the per-aircraft cost was around $82 million. Today, the cost has more than doubled, placing a much heavier strain on the Indian taxpayer.
National Security vs. Economic Strain
The MRFA program is considered essential for national security. It is driven by the need to counter the growing airpower of China, which operates advanced fifth-generation stealth fighters like the J-20, and to maintain superiority over Pakistan's modernized air force.Leading global contenders, including the Dassault Rafale, Boeing's F/A-18 Super Hornet, and Lockheed Martin's F-21 (a variant of the F-16), are being evaluated. A core requirement of the deal is a significant "Make in India" component, mandating technology transfer and local manufacturing.
However, the ₹2,00,000 crore price tag is a monumental investment, representing nearly 2% of India's projected GDP for 2025. This figure includes not just the jets but also a complete package of weaponry, training, infrastructure, and long-term maintenance.
This massive expenditure comes when the country has other pressing needs in sectors like healthcare, education, and public infrastructure.
Defence analysts question how the program can be justified financially today when it was considered unaffordable at a fraction of the current cost over a decade ago.
There are also concerns that this high-cost acquisition could divert funds from vital indigenous defence projects, such as the HAL Tejas Mk-1A and the futuristic Advanced Medium Combat Aircraft (AMCA), which are crucial for achieving long-term self-reliance.
To manage this financial challenge, experts suggest a more practical approach. This could involve streamlining the complex procurement process to avoid future delays, conducting firm price negotiations, and ensuring that technology transfer agreements provide tangible economic benefits.
Another option is a phased acquisition, where a smaller initial batch is purchased with provisions for follow-on orders, allowing the cost to be spread over several years while still addressing the IAF's immediate operational needs.
