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December 23, 2021

India fines MBDA for offsets duty delay in Rafale jets deal

MBDA is the weapons package supplier for the fighter jets manufactured by Dassault Aviation.

The Indian Defence Ministry has reportedly imposed a penalty on MBDA for delay in fulfilling offsets commitments in the Rafale multi-role jets deal.

The ministry levied a fine of less than €1m on the European defence manufacturer.

The penalty has been “collected” from MBDA, reported The Times of India (TOI) citing defence sources.

The source told TOI that “after it slipped in discharging its offsets obligations for the first applicable year from September 2019-September 2020”.

In 2016, France and India signed the contract for the acquisition of 36 Rafale for the Indian Air Force (IAF) at a cost of Rs590bn (€7.8bn), and the offset obligations were part of this contract.

Of the total 36 jets, six will be trainers while the remaining 30 will be fighter jets.

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Manufactured by Dassault Aviation, the aircraft was developed for the French Navy and French Air Force to conduct short and long-range missions, including ground and sea attacks.

Rafale is a twin-jet combat aircraft fitted with long stand-off weapons such as the over 300km range Scalp air-to-ground cruise missiles and Meteor air-to-air missile.

In September last year, the IAF formally inducted the first five Rafale aircraft at Ambala Air Force Station in India.

In June this year, IAF raised the second Rafale squadron, the 101 ‘Falcons of Chhamb and Akhnoor’, in Ambala.

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