Defence Minister Nirmala Sitharaman on Wednesday rejected allegations that Rafale fighter jets being bought by India from France are priced higher than under an earlier deal, and said the charges were "motivated and baseless"."The allegations are motivated and baseless. the government has bought Rafale aircraft on better terms," Sitharaman said in a written reply to the Lok Sabha.She said that the Defence Procurement Procedure was followed for the deal and an Inter-Governmental Agreement signed on September 23, 2016, after approval from the Cabinet Committee on Security.Earlier this week, Sitharaman, in a written reply to the Rajya Sabha, had said the price of the 36 Rafale aircraft under the present deal cannot be compared with the cost of the original MMRCA (Medium Multi-Role Combat Aircraft) deal, but added that the present deal had better terms.The MMRCA proposal was for the procurement of 126 aircraft, as per which 18 aircraft were to be in fly-away condition whereas 108 aircraft were to be manufactured in India under licence.In the present deal, 36 Rafale aircraft are being procured in fly-away condition.
"There is no increase in the cost. Instead, a better price has been ensured," Sitharaman said."The cost of the 36 Rafale aircraft cannot be directly compared with the cost under the original MMRCA proposal as deliverables are significantly different. Though there is no transfer of technology in the procurement of the 36 aircraft, the provision of 50 per cent offsets has been retained. The delivery schedule, maintenance arrangement and product support under the Inter-Governmental Agreement are more beneficial," she said.In 2000, in order to replace the existing MiG-21 aircraft, a case to procure 126 Mirage-2000 aircraft was initiated in year 2000, which was later converted into procurement of 126 MMRCA. According to information given to the Rajya Sabha by the Defence Minister, the Request For Proposal (RFP) was issued in 2007, wherein six vendors responded. On completion of field evaluation trials, only two of the six vendors were found to be fully compliant. Commercial proposals of both vendors -- EADS and Dassault Aviation -- were opened and negotiations were commenced with DA as the L1 vendor in November 2011.The contract negotiations had reached an impasse and the RFP was formally withdrawn on June 24, 2015. To meet the IAF's critical operational necessity, 36 Rafale were procured through the Inter-Governmental Agreement route."The government decided to procure 36 aircraft through the government-to-government route to meet the critical operational necessity' of the IAF," Sitharaman had informed the Rajya Sabha.An Inter-Governmental Agreement was signed on September 23, 2016, between the governments of India and France.Asked about the offset partner in the present deal, Sitharaman said the vendor is free to select the Indian offsets partners.