India fines missile manufacturer for breach of Rafale contract

India’s defense ministry imposed a fine on European missile manufacturer MBDA for failing to meet contractual obligations. 

The fine of “less than €1 million” was issued after MBDA delayed its offset obligations in the period between September 2019-September 2020, The Economic Times reports, referring to unnamed sources. 

According to the sources, MBDA lodged a protest with the ministry, but has also deposited the penalty. 

In 2015, India signed a €7.8 billion contract with Dassault for 36 Rafale fighter jets, which included various weapons such as Meteor missiles manufactured by MBDA. According to the contract, 50% of the cost had to be offset by reinvesting into the Indian defense sector.  

MBDA, a joint venture between Airbus, Leonardo and BAE Systems, was created in 2001. The company manufactures a variety of missiles, including air-to-air and air-to-ground missiles, used by European fighter jets such as Dassault Rafale and Eurofighter Typhoon.  

India selected Rafale as the result of the Medium Multi-Role Combat Aircraft (MRCA) competition. The first batch of jets were ferried from France to India in the summer of 2020, and were inducted into the Indian Air Force in September of the same year.