About this development: The Indian Air Force (IAF) has submitted a proposal to the Ministry of Defence to procure 114 Rafale fighter jets to be built in India in collaboration with Dassault Aviation and Indian aerospace firms. The aim is to raise the total Rafale fleet to 176 aircraft, combining current and past orders. If approved, this would become India’s largest defence procurement ever. The jets are expected to include over 60% indigenous content, reinforcing the country’s push for self-reliance in defence manufacturing.

• Deal Size & Value: The proposal is valued at over ₹2 lakh crore, making it potentially the biggest single defence contract in India’s history.
• Quantity & Fleet Strength: If the deal goes through, India will have a total of about 176 Rafales — 36 already inducted by the IAF and 26 ordered by the Navy.
• Indigenous Content: The jets are to be built in India with more than 60% local content, involving Indian firms in manufacturing, assembly, possibly even maintenance, repair, and overhaul (MRO).
• Production & Partners: Dassault Aviation will work with Indian aerospace firms like Tata Advanced Systems and others. A Maintenance, Repair, and Overhaul (MRO) facility for the M-88 engines (used in Rafales) is proposed in Hyderabad.

The proposal, in the form of the Statement of Case, has been submitted to the Ministry of Defence and is being reviewed by various departments including Defence Finance.

Next steps include discussions by the Defence Procurement Board, followed by reference to the Defence Acquisition Council for approval.

• Security Strengthening: The addition of 114 more Rafales would significantly enhance India’s combat readiness, especially as older fleet types are retired.
• Boost to Defence Industry: Much of the work will be done by local companies—Tata, L&T, HAL, BEL, Bharat Forge etc.—spurring job creation, skill development, and higher technological absorption.
• Make in India Inertia: This aligns with India’s long-term push towards self‐reliance in defence capabilities. Locally making components, potentially even fuselage assemblies, and setting up engine MRO capacities are key parts.
• Operational Commonality: With more Rafales across services, there are benefits in training, maintenance, spares, and interoperability. Also helps accelerate capability deployment.

• Approval Process: Getting approvals may take time; finance, legal, technical evaluations have to be thorough. Even though the Ministry has begun review, the path ahead has several stages.
• Local Capability: Ensuring India-based firms can match quality, timelines, supply chain reliability for sophisticated aircraft components and sub-systems could be a bottleneck.
• Technology Transfer & Proprietary Issues: Transfer of source code, sensitive systems, and integration of indigenous weapons or missiles may require detailed negotiations and safeguarding of intellectual property.
• Cost Overruns & Delivery Schedule: Large defence deals often suffer from escalation in costs and delays. Ensuring robust contracts, fixed terms, and performance tracking will be essential.

• HAL (Hindustan Aeronautics Ltd): May gain from final assembly, systems integration, maintenance tasks, and may get orders for parts or coatings. Strengthens its position in India’s aviation value chain.
• Dassault Aviation: Anchor foreign partner; will benefit from contracts, technology collaboration, and possible export potential from India‐made Rafales or components.
• Private Defence Firms: Companies like Tata Advanced Systems, Bharat Forge, Paras Defence, L&T, Dynamatic Technologies and others are likely to be heavily involved in sub‐assemblies, fuselage sections, electronics, avionics, engines MRO etc. Their order books could expand significantly.

• This deal, if approved, can reshape the defence manufacturing landscape in India—companies with strong capabilities in aerospace, avionics, engines and precision components may see long‐term revenue growth.
• Stocks of HAL, Tata Advanced Systems, Bharat Forge, BEL, Dynamatic Tech etc. might be re‐rated on execution of contracts and delivery of components; watch for partnership announcements and supply chain wins.
• Risks include contract delays, certification issues, budget revisions; those companies which manage to secure predictable and quality‐backed contracts will likely outperform peers.
• Governance over approvals will be key; changes in leadership, politics or budgetary pressure may influence timeline and contents.

Over the coming weeks the proposal will be examined in detail by the Defence Procurement Board. If favourably reviewed, it goes to the Defence Acquisition Council. After that, detailed negotiations for pricing, technology transfer, local content benchmarks, delivery schedules and performance guarantees will follow. Production lines may need scaling up, supply chains validated, and engine MRO facility construction initiated.

Defence, Rafale, Defence Procurement, Make in India, IAF, Aerospace Stocks