01/06/2015 2:45 PM IST | Updated 15/07/2016 8:25 AM IST

Parrikar Says India To Buy Only 36 Rafale Jets, Previous Deal Cancelled

A Rafale jet fighter performs a demonstration flight in Merignac near Bordeaux, southwestern France, Wednesday, March 4, 2015. Egypt will become the first foreign buyer of Rafale fighter jets, purchasing 24 of the multi-role French-made aircraft as part of a 5.2 billion-euro (US$5.93 billion) defense deal that will strengthen Cairo's military might in a tense and violent region. (AP Photo/Bob Edme)

NEW DELHI - The world's biggest order for fighter jets just got scrapped.

India's tender for 126 Rafale fighter aircraft, carried out through long delays by the previous UPA government and estimated to cost Rs 1.3 lakh crore, is not economically viable, said Defence Minister Manohar Parrikar. India will now buy 36 of the jets, as part of the deal signed during Prime Minister Narendra Modi's visit to France.

Rafale jets, made by France's Dassault Aviation, had been declared as the lowest bidder in the final stage of India's so-called MMRCA contest (medium multi-role combat aircraft). The previous government had been carrying out techno-commercial negotiations with Dassault when the regime change in New Delhi happened.

"We are buying only the direct 36 and not the rest," said Parrikar. "I also feel like having a BMW and Mercedes. But I don't because I can't afford it. First I can't afford it and second I don't need it. So, 126 Rafales was economically unviable. It was not required," Parrikar said.

India, the world's largest importer of defence weapons, had been in negotiations to buy 126 of the Rafale fighters, and the plan was to manufacture bulk of the planes in India by state-owned Hindustan Aeronautics Ltd. The deal was delayed over India's insistence on guarantees for the quality of jets made in India, something that Dassault had not agreed to. That deal has now been scrapped altogether. As part of Modi's deal, all 36 of the jets will be manufactured in France.

Parrikar also criticised the UPA government's deal with Rafale, saying that his predecessor AK Antony had hammered the tender with such conditions that it would never have seen the light of day. One major problem was that Dassault Aviation, maker of the Rafale, was not given a clear go-ahead even after the government announced its selection as the lowest bidder.

"After L1 was determined, he said go ahead with cost negotiations and, after negotiations are complete, go back and check on methodology of L1, whether it was correct or not. You are forcing your supplier to come back to you. Why did it happen? What is the reason? He (Antony) should answer," said Parrikar.

The opposition Congress party has criticised that Modi had by-passed the Finance Ministry and the Defence Acquisition Council, the apex body of the Defence Ministry that takes the call on military projects, when he signed the deal for 36 Rafale jets.

Parrikar said that opposition parties should wait until the deal is finally operationalized, after on-going negotiations with Rafale over the price of the jets. That process is expected to take a couple of months.

India's MMRCA was at one point the world's largest outstanding military tender. Sweden's Saab Gripen, Eurofighter Typhoon, Russia's MiG-35 and America's F/A-18 Super Hornet and F-16 were in the race.

In April, Parrikar had hinted that his government might not pursue the deal as laid down by the previous government.

(With agency inputs)