India Fines European Missile Firm MBDA Over Failure to Meet Fighter Deal Commitments

Indian officials have approved imposition of fines on the European defence firm Matra BAE Dynamics Alenia (MBDA) over having "slipped in discharging" its offset obligations under contracts for joint manufacturing of air launched missiles to equip French-built Rafale fighter jets. This follows revelations of an extensive corruption scandal surrounding the $8.8 billion deal to acquire Rafale fighters, with the French government reportedly having payed extensive bribes to secure a contract for the fighter which had otherwise struggled on export markets. MBDA and India's Larsen and Toubro (L&T) entered an agreement in February 2017, shortly after the Rafales were contracted, with India seeing significant shortcomings in implementation from the European side in the 12 months from September 2019. MBDA lodged a protest over the fine, which may affect prospects for future defence deals by European firms. 

The Rafale first flew in 1986 and entered service in 2001, It is considered a '4+ generation' lightweight aircraft from the same weight range as the American F-18C Hornet, but remains  one of the most expensive fighters on world markets despite its size having been sold for $240-260 million per unit. The fighter failed to gain interest from developed countries in Europe, Singapore, the UAE and South Korea, losing every tender where it was pitted against either the American F-15 or the F-35, as well as losing to the F-16 in Morocco and the UAE. India itself initially planned to acquire 126 fighters, but reduced its order to just 36 aircraft due to dissatisfaction with how the French side would implement the deal. The Rafale has a below average speed and flight performance, and uses the weakest fighter engines in production anywhere in the world today. Its access to advanced air to air missiles, namely the MBDA Meteor, is considered vital to compensate for this deficiencies and allow it to engage other modern fighters in air to air combat. 

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