India stands on the brink of a landmark defence agreement with France, poised to manufacture Rafale fighter jets domestically under a massive procurement deal valued at approximately ₹3.25 lakh crore. 

Reports indicate that this initiative will see 114 advanced Rafale aircraft acquired for the Indian Air Force, with 18 delivered in fly-away condition directly from France and the remaining 96 built on Indian soil.

This arrangement promises to elevate India's air defence capabilities while significantly advancing its indigenous manufacturing prowess in aerospace.

Negotiations emphasise maximising local content, targeting around 60 to 80 per cent indigenisation, a sharp rise from the initial 30 per cent projection. Key production elements, including the fuselage, will shift to facilities like Tata Advanced Systems in Hyderabad, marking the first time Rafale components of this scale are produced outside France.

Dassault Aviation has already partnered with Tata for fuselage manufacturing, aiming for a rollout starting in fiscal year 2028 at a rate of two units per month, complemented by existing contributions from Dassault Reliance Aerospace Limited in Nagpur.

The final assembly line is slated for the Dassault Reliance facility in Nagpur, which could eventually serve global Rafale demand as a secondary hub with capacity for 24 aircraft annually. This setup aligns with India's push to establish a maintenance, repair, and overhaul (MRO) facility, enhancing aircraft serviceability and positioning the nation as a regional hub for Dassault platforms.

Such infrastructure will reduce dependency on foreign supply chains and foster technology transfer critical for long-term self-reliance.

This deal builds on prior successes, including the 2016 purchase of 36 Rafales and the 2025 order for 26 Rafale Marine jets for the Navy, potentially making India the largest Rafale operator worldwide outside France.

With Dassault's production capacity expanding to 50 jets yearly, the Indian line will play a pivotal role, supporting not just domestic needs but export ambitions. Talks also extend to joint engine development for India's Advanced Medium Combat Aircraft, deepening Franco-Indian defence ties.

Contract finalisation is anticipated in 2026, streamlining processes after broad contours were agreed upon, bypassing prolonged tendering under government-to-government routes. Priced with inflation adjustments, the deal addresses fiscal prudence while boosting jobs and skills in India's defence ecosystem.

Ultimately, this procurement fortifies India's strategic posture amid regional tensions, blending cutting-edge French technology with homegrown innovation.

Based On First Post Report

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