Hindustan Aeronautics Limited (HAL) has firmly denied receiving any official word on a massive procurement deal for 114 Rafale fighter jets, casting doubt on reports of joint manufacturing with France's Dassault Aviation,  as per a report by Business Today.

The clarification emerged after the Ministry of Defence announced on Thursday that the Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, had greenlit the acquisition of these multi-role fighter aircraft (MRFA) from France.

This announcement timed neatly ahead of French President Emmanuel Macron's impending visit to India, underscoring deepening defence ties between the two nations.

HAL's statement, filed in response to media reports, stressed: 'With respect to the said article, we would like to clarify that the company did not receive any such official communication from the Ministry of Defence or Dassault in this regard.'

The reports in question had claimed that around 20 Rafales would arrive in fly-away condition, bolstering the Indian Air Force (IAF) fleet by 2030, with the remaining jets produced collaboratively by Dassault and HAL in India.

HAL's rebuttal highlights a communication gap, potentially signalling that while high-level approvals exist, operational details for industrial participation remain under wraps.

Despite the uncertainty, HAL shares rose 2.05 per cent to ₹4,244 during Friday's trading session, reflecting investor optimism. Over the past year, the stock has surged 15.96 per cent. This potential deal, dubbed the 'mother of all defence deals', carries an estimated value of ₹3.60 lakh crore, making it one of India's largest-ever military procurements.

The Rafale program aims to enhance the IAF's air dominance, equipping it with advanced long-range strike capabilities and bolstering deterrence against regional threats.

Most crucially, the majority of the aircraft are slated for manufacture in India, aligning with the government's 'Aatmanirbhar Bharat' push for self-reliance in defence production. Such indigenous manufacturing would not only create jobs and build local expertise but also transfer critical technologies, reducing dependence on imports.

HAL, a cornerstone of India's aerospace sector with a track record in projects like TEJAS and Su-30MKI, stands as the natural partner for this venture given its infrastructure and experience.

Yet, the absence of formal communication raises questions about timelines, offsets, and the exact scope of Dassault's involvement—issues that have dogged past India-France defence pacts.

France has long been a key supplier to India, with the earlier 2016 deal for 36 Rafales already proving contentious over pricing and performance.

That deal, valued at over ₹59,000 crore, delivered jets that have since integrated into IAF squadrons, showcasing the Rafale's prowess in air superiority and nuclear deterrence roles.

The new proposal scales this up dramatically, addressing the IAF's depleting squadron strength, currently hovering around 30 against an authorised 42. The timing aligns with India's strategic pivot amid tensions with China and Pakistan, where advanced fighters like the Rafale offer spectrum dominance.

Macron's visit is expected to seal broader agreements, possibly including submarine deals and space cooperation, further cementing the Indo-French axis.

However, HAL's denial could stem from procedural formalities; DAC approvals often precede detailed contract negotiations and partner consultations. Market watchers remain bullish, viewing HAL's stock uptick as a bet on eventual involvement, given its monopoly-like status in military aircraft production.

Critics, though, point to HAL's delivery delays on indigenous projects like TEJAS, fuelling debates on whether private players like TATA or Reliance should compete for such offsets. The government has increasingly favoured public-private partnerships, as seen in recent UAV and engine deals, to accelerate indigenisation.

The Rafale saga underscores India's balancing act: rapid capability infusion versus long-term self-reliance. As details emerge post-Macron's trip, clarity on HAL-Dassault collaboration will be pivotal for investors and strategists alike.

Based On BT Report