India has imposed a one-million-euro penalty for the delay in the Rafale aircraft contract
According to a report, the penalty was "imposed and collected" from MBDA as part of an overarching new policy to tighten the screws on defaulting weapons firms.
India has slapped a penalty on MBDA, a German missile manufacturer, for failing to meet offset pledges in the Rafale aircraft deal, which saw India and France agree to buy 36 planes for Rs 59,000 crore.
According to The Times of India, which cited top defense sources, the penalty was “imposed and collected” from MBDA as part of an overall new policy to tighten the screws on defaulting weapons firms. According to the inter-governmental agreement signed by India in September 2016, MBDA is a weapons package supplier for the Rafale jets made by Dassault Aviation.
According to the report, India has signed a significant offsets deal with Dassault and a smaller one with MBDA, in addition to the inter-governmental agreement with France and supply procedures for fighters and ammunition. According to the article, half of the contract value (about Rs 30,000 crore) must be returned to India as offsets or reinvestments as part of the agreement.
The offsets will be phased out over seven years from the date of contract signing, with no discharge in the first three years.
“MBDA was fined after it failed to discharge its offsets commitments for the first applicable year, September 2019-September 2020,” the paper claimed, citing a source.
According to reports, the penalties imposed on MBDA is equal to 5% of the deficiency in offset discharge in a given year, or less than 1 million euro.
“The issue will be re-examined now that the deficiency has been carried over to the second year,” the insider told the publication.
The MBDA paid the fine but also filed a protest with the Ministry of Defence, according to the newspaper.
On July 29, 2020, India got the first of five Rafale jets from French aerospace giant Dassault Aviation. The Rafale fighters are India’s first big fighter plane purchase in 23 years, following the procurement of Russian Sukhoi jets.
The multi-role Rafale planes are famed for their excellent air supremacy and pinpoint accuracy. They have the ability to carry a variety of powerful weapons. The Meteor beyond visual range air-to-air missile and the Scalp cruise missile from MBDA are the mainstays of the Rafale fighters’ weaponry kit. Meteor is a next-generation beyond visual range air-to-air missile (BVRAAM) that is set to change the way air-to-air warfare is conducted.
