NEW DELHI: The Cabinet Committee on Security (CCS) has approved the $1.2 billion deal for the new weapon compliment for the Mirage 2000 fighter jets of the Indian Air Force (IAF) that will give the aircraft a superior firepower capability to hit the enemy beyond its visual range.
Along with the earlier contract signed with French firms valuing $2.4 billion, it is the second largest defence deal signed with France after the project to construct six Scorpene submarines at the Mazagon Docks Limited (MDL) costing $5.23 billion. The deal was the main highlight of the visit of French President Nicholas Sarkozy to India, but could not be finalised owing to price issues. Under the contract, the IAF will be procuring about 500 air-to-air missiles from French armament firm MBDA. While MBDA will be the weapon provider, French company Thales will be the weapon integrator.
According to sources, the CCS chaired by Prime Minister Manmohan Singh cleared the Euro 950 million ($1.2 billion) deal for acquisition of 490 MICA missiles.
The IAF presently has 51 Mirage fighter jets in its inventory and they will be undergoing upgrades at the cost of $ 1.47 billion, as per a contract signed in 2011. Already two aircraft have flown to France for upgradation. The remaining aircraft will be modernised here in India at the Hindustan Aeronautics Ltd (HAL). The upgradation of the entire fleet is expected to be completed by mid-2021.
The missile deal also entails 30 percent offsets, which means that MBDA will be investing $ 410.7 million in the Indian defence sector. The Defence Procurement Procedure (DPP) makes it mandatory for foreign vendors getting contracts upwards of `300 crore to invest 30 percent of the value of the deal in the domestic defence industry, including civil aerospace and homeland security.