PM Modi previously claimed that the Rafale deal of 7.87 billion euros is on better in terms of price and time of delivery than the one suggested by the Indian Negotiation Team but as per reports, the reality is the exact opposite of that.Reports shows deal is done at a price of 55.6% more than the one which suggested by the INT.
Delivery of the Rafale jets is also said to be more than the Eurofighter deal which was suggested by the INT in the beginning. The final deal done by the National Democratic Alliance will deliver the 36 aircrafts late by 5-7 months and even then the jets will not be fully equipped as they will be missing 13 India Specific Enhancements.
The reason of the price increase is said to be the change in price system as the deal which was finalized by the INT during UPA government was based on fixed price whereas the French government changed it to an escalation formula and Modi government accepted it at a price of 7.87 billion euros. The Eurofighter deal was finalized by INT at 20% Discount at a fixed price.
Another problem as given in the 8 page dissent note of the INT says “The aircraft offered by M/s Dassault Aviation did not meet certain Aerospace Supplier Quality Requirement and M/s Dassault Aviation offered to meet these deficiencies at an additional cost” and these costs were included in the price of India Specific Enhancements.
One more problem as per the report of the INT officials is the bank guarantee. the UPA government finalized the deal on Bank Guarantees but the NDA gave no such government or bank guarantee to the French government and finalized the deal on a letter of comfort.
The Comptroller and Auditor General of India did not comment on the dissent given by the Indian Negotiation Team.