India aims to sign the contract for the world’s biggest order of fighter jets in about two decades with Dassault Aviation SA (AM) by the end of the year, two Indian air force officials familiar with the matter said today.
Negotiations on technology transfer and maintenance for 126 Rafale aircraft have been completed, the officials said in New Delhi, asking not to be identified as the discussions aren’t public. Discussions on the price must still be completed, they said. The deal will probably be for more than $11 billion.
In 2012, the Indian government chose Dassault to supply at least 126 Rafale combat planes after initiating the purchase plan about five years earlier. Until India decided on the Rafale, Dassault had failed to win any export contracts for the jet.
Asia’s third-largest economy has tripled defense spending over the past decade as it increasingly looks beyond Russia to modernize the military and orders arms from countries including the U.S.
Nungsanglemba Ao, an Indian defense ministry spokesman, declined to comment on the Rafale order. Stephane Fort, a spokesman for Paris-based Dassault Aviation, didn’t respond to a message on his mobile phone or an e-mail.
While the country of 1.2 billion people is both a nuclear power and the world’s biggest arms importer, defense spending in India is near a half-century low as a percentage of the economy and many weapons are obsolete.
China, the biggest spender on defense after the U.S., has doubled its defense budget since 2006.
Dassault Aviation shares were little changed at 1088.95 euros in Paris at 1:30 p.m. The stock has climbed 17 percent this year, compared with the 2.2 percent gain in the Stoxx Europe 600 Index.
To contact the reporter on this story: N.C Bipindra in New Delhi at firstname.lastname@example.org