Exclusive: What Rafale plan looks like—TATA, L&T, Mahindra and HAL
France submitted a detailed industrial partnership proposal in response to India's plan to acquire 114 additional Rafale fighter aircraft, received on the Indian side in late July 2026.
The proposal includes India's first-ever Rafale final assembly line to be located outside France, to be set up by the Tata group.
Larsen & Toubro (L&T) is proposed to partner with missile-maker MBDA; Mahindra Group with Thales for electronics and avionics; and Hindustan Aeronautics Limited (HAL) with engine-maker Safran for propulsion, with potential linkages to India's Advanced Medium Combat Aircraft (AMCA) programme.
The proposal is structured to meet the Indian Air Force's indigenous content requirements — a minimum of 40% for the initial batch, rising to 60% for later production batches — with total effective domestic value addition potentially reaching around 80% over the aircraft's operational life through an in-country Maintenance, Repair and Overhaul (MRO) facility.
Proposed costs are stated to remain within the Defence Acquisition Council (DAC)-cleared value, with the government aiming to conclude a contract before the end of the current financial year.
Defence Acquisition Procedure — DAC, AoN and the Buy Global/Government-to-Government Route
India's defence capital procurement follows a structured process under the Defence Acquisition Procedure (DAP), beginning with the Defence Acquisition Council (DAC) — the apex approval body chaired by the Raksha Mantri — granting an "Acceptance of Necessity" (AoN) before a Request for Proposal or government-to-government negotiation proceeds. Major acquisitions ultimately require clearance from the Cabinet Committee on Security (CCS).
Key Details
- The DAC granted the Acceptance of Necessity for 114 Rafale jets under the Multi-Role Fighter Aircraft (MRFA) programme on 12 February 2026, valued at approximately Rs 3.25 lakh crore (about $36 billion) for the Rafale component.
- The government-to-government route was adopted in place of a fresh multi-vendor MRFA tender competition, mirroring the approach used for the original 36-aircraft deal in 2016.
- Final commercial negotiations and contract signature require subsequent approval from the Cabinet Committee on Security (CCS), the highest authority for major defence procurement decisions.
France's industrial roadmap is the formal response required to move the DAC-approved 114-jet proposal toward a government-to-government contract, expected before the close of the current financial year.
The Strategic Partnership (SP) Model in Defence Manufacturing
The Strategic Partnership model, notified in 2017 as Chapter VII of the Defence Procurement Procedure 2016 ("Revitalising Defence Industrial Ecosystem through Strategic Partnerships"), enables private Indian companies to tie up with foreign Original Equipment Manufacturers (OEMs) for building major platforms domestically, with mandatory technology transfer.
Key Details
- The SP model was promulgated on 31 May 2017, initially covering four segments: submarines, helicopters, fighter aircraft, and armoured fighting vehicles/main battle tanks.
- Typically one Strategic Partner is selected per segment/programme, expected to build long-term indigenous manufacturing capability rather than a one-off assembly line.
- Mandatory technology transfer from the foreign OEM to the Indian partner is a defining feature, intended to build a sustainable domestic defence-industrial ecosystem.
Tata's role in hosting Rafale's first-ever assembly line outside France, alongside L&T-MBDA, Mahindra-Thales and HAL-Safran partnerships, reflects the SP model's logic of embedding technology transfer and long-term manufacturing capability with Indian private and public players rather than a simple import.
The 2016 Rafale Deal (36 Aircraft) as Precedent
India's first Rafale acquisition — 36 fully built aircraft via a 2016 inter-governmental agreement — provides the baseline against which the new 114-aircraft deal's industrial and offset commitments are being compared.
Key Details
- The Cabinet Committee on Security cleared the Inter-Governmental Agreement in September 2016 for 36 Rafale jets at a cost of roughly Rs 58,000 crore (about $8.7-9 billion).
- The IAF operates its two existing Rafale squadrons — the "Golden Arrows" (No. 17 Squadron) at Ambala Air Force Station (western sector) and a squadron at Hasimara Air Force Station in West Bengal (eastern sector, near the China border).
- The 2016 deal carried offset obligations requiring reinvestment of a share of contract value into India's defence-related industrial and research base, but did not include a Rafale assembly line in India.
Unlike the 2016 deal, the 114-aircraft proposal for the first time includes actual manufacturing (not just offsets) on Indian soil, with a full final assembly line — marking a qualitative shift from "Buy Global" to substantial domestic production, and would take India's total Rafale fleet toward 176 aircraft (36 IAF + 114 new IAF + 26 Navy variants).
Advanced Medium Combat Aircraft (AMCA) — India's Indigenous Fifth-Generation Fighter Programme
The AMCA is India's indigenous fifth-generation stealth fighter programme, now being executed through a "Programme Execution Model" that opens participation to private-sector-led consortia alongside public-sector entities, departing from the earlier HAL-centric approach used for the Tejas.
Key Details
- The Ministry of Defence approved a new execution model for AMCA around May 2025, inviting private-sector-led consortia (including Tata Advanced Systems, L&T with Bharat Electronics Limited, and Bharat Forge with BEML) to compete for programme leadership, alongside HAL.
- First AMCA prototype flight is targeted around 2029, with development completion targeted around 2034 and series production expected from around 2035.
- HAL's proposed collaboration with French engine-maker Safran on Rafale propulsion is described as having potential linkages to AMCA's engine development needs, given India's current lack of an indigenous fighter-class jet engine.
HAL's Rafale-linked partnership with Safran is significant less for near-term Rafale assembly and more for the technology and co-development pathway it could open for AMCA's engine programme, an area where India currently depends entirely on foreign suppliers.
- Proposal for 114 Rafale jets: DAC Acceptance of Necessity granted 12 February 2026; value approximately Rs 3.25 lakh crore (~$36 billion) for the Rafale component.
- French industrial proposal received by India: 29 July 2026.
- Indigenous content requirement: minimum 40% for the initial (F4-standard) batch, rising to 60% for final production batches; potential ~80% effective domestic value addition over the aircraft's lifecycle including MRO.
- Industry partners: Tata (final assembly line — first outside France), L&T with MBDA (missiles), Mahindra with Thales (avionics/electronics), HAL with Safran (engines, AMCA linkage).
- Total prospective Rafale fleet if deal concludes: 176 aircraft (36 IAF Rafales from the 2016 deal + 114 new IAF jets + 26 Navy variants).
- 2016 Rafale deal: 36 aircraft, Inter-Governmental Agreement signed September 2016, cost approximately Rs 58,000 crore.
- IAF Rafale squadrons: No. 17 "Golden Arrows" Squadron at Ambala (western sector); second squadron at Hasimara (eastern sector, West Bengal).