The Indian Navy's plan to acquire 26 Rafale Marine (Rafale M) fighter jets from France has raised questions about whether this is the most expensive fighter jet deal for India on a per-unit basis, potentially exceeding the 2016 purchase of 36 Rafale jets for the Indian Air Force (IAF).
While the Rafale M deal, estimated at ₹60,000 crore (approximately $7.2 billion), is a significant investment for India's naval capabilities, a direct comparison with the previous deal reveals a more complex situation.
The Defence Acquisition Council approved the Rafale M deal in July 2023. It includes 22 single-seat aircraft and four twin-seat trainers, all designed for operations from aircraft carriers like the INS Vikrant and INS Vikramaditya.
The comprehensive package includes the aircraft, weapons (such as Meteor, Exocet, and SCALP missiles), simulators, spare parts, crew training, and ten years of logistical support.
Negotiations between Dassault Aviation (the manufacturer), the French government, and India are being finalized under an inter-governmental agreement, with the deal expected to be signed by mid-2025.
The total cost of ₹60,000 crore breaks down to roughly ₹2,307 crore ($277 million, using a current exchange rate of $1 = ₹83.5) per aircraft. This has led some to claim it is India's most expensive fighter jet acquisition, particularly as it is the Navy's single largest purchase. However, a fair comparison with the 2016 IAF deal requires a detailed breakdown of costs and considerations.
In September 2016, India contracted with France for 36 Rafale jets for the IAF at a cost of €7.87 billion (approximately $8.8 billion at the time). This included 28 single-seat and eight twin-seat aircraft.
This agreement, which followed lengthy negotiations and the cancellation of a larger 126-aircraft tender, included India-Specific Enhancements (ISEs) such as helmet-mounted displays and cold-engine start capabilities.
It also covered weapons (Meteor and SCALP missiles), spare parts, and a five-year performance-based logistics package designed to ensure 75% fleet availability.
The 2016 contract's €7.87 billion price tag was composed of several elements: €3.3 billion for the basic aircraft (averaging €91.7 million or ₹686 crore per jet at 2016 exchange rates), €1.7 billion for ISEs, €700 million for weapons, €1.8 billion for spare parts, and €350 million for logistics. This totaled €218 million per jet (₹1,630 crore).
If we adjust this figure for inflation to 2025 (assuming a conservative 3% annual inflation rate), the cost rises to approximately €289 million (₹2,412 crore at the current exchange rate of ₹83.5/€1), representing the equivalent cost in today's terms.
Comparing Unit Costs
- Rafale M (2025): ₹2,307 crore ($277 million) per jet, including weapons, training, and a 10-year support package.
- Rafale IAF (2016, adjusted for inflation to 2025): ₹2,412 crore ($289 million) per jet, including ISEs, weapons, and a five-year support package.
The higher per-unit cost of the 2016 deal was significantly influenced by one-time costs, such as the €1.7 billion for ISE development, spread across only 36 aircraft instead of the originally planned 126. This substantially inflated the per-unit price.
The Rafale M deal benefits from these earlier investments, avoiding similar non-recurring expenses, although it does incorporate modifications specific to naval operations, such as reinforced landing gear and an arrestor hook.
A direct comparison is further complicated by the differing contents of each deal. The Rafale M's $277 million unit cost includes ten years of logistical support, double the five-year period included in the IAF deal. It also includes maritime-specific weaponry like the Exocet missile, which was not part of the 2016 package.
Conversely, the IAF Rafales included unique ISEs, adding €47 million per jet in development costs alone.
A precise "bare aircraft" cost comparison is impossible without access to official, classified breakdowns. However, some reports suggest the Rafale M's base price is similar to the 2016 deal's €91.7 million, adjusted for inflation (approximately €120 million or ₹1,000 crore today).
The additional costs of weapons and extended support increase the overall price, but not necessarily beyond the adjusted total cost of the IAF's aircraft.
Internationally, India's Rafale costs fall within a reasonable range. Egypt paid €125 million per jet for 30 Rafales in 2021 (a second batch without ISEs), while Qatar's 2015 deal for 24 jets averaged €263 million, including weapons and training.
The Rafale M's $277 million price aligns reasonably, considering its carrier-specific features and long-term support. This is in contrast to the IAF's adjusted $289 million, which reflects a smaller purchase quantity and custom enhancements.
While some critics have pointed out that the Rafale M deal may not include technology transfer, its strategic importance for maintaining naval superiority in the Indo-Pacific region, particularly in light of China's growing naval power, is a significant factor.
The 2016 deal, although more expensive per unit, addressed a critical need to bolster the IAF's fighter squadron strength, presenting a different set of strategic priorities.
In conclusion, while the Rafale M deal is a substantial investment, claiming it is definitively more expensive per unit than the previous Rafale deal requires careful consideration of differing contract terms, inflation, and the specific requirements of each branch of the armed forces.
