Defense News learned that last month the Indian government fined French aerospace major Dassault Aviation for delays in offsetting obligations related to the purchase of 36 Rafale fighters in 2016. The French and Indian governments signed US $8.8 billion contract in September 2016.
In seven years’ time, Dassault Aviation and its partners Safran and Thales were to offset and execute 50% of the contract value. To implement the offsets, the three firms teamed with more than 70 Indian companies and the DRDO.
An official of Defence Ministry under anonymity told that the penalty will from the 185 million Euros bank guarantee funded by Dassault Aviation as a safeguard against contractual violations.
The MoD policy allows original equipment manufacturers to discharge offsets through foreign direct investment in the Indian defence sector, by purchasing related goods or services from Indian suppliers, or by transferring advanced technologies.
