India expects to sign a contract to purchase up to 126 Dassault Rafale fighters by the middle of this year, the country’s air force chief says, trying to put to rest speculation that recently announced budget cuts could delay the acquisition.

The government has cut defense spending for its current fiscal year ending March 31 by about 5% from the originally allocated 1.93 trillion rupees ($38.6 billion), mainly due to the ongoing economic downturn (Aerospace DAILY, Feb. 7).

“The deal is highest priority for us,” Air Chief Marshal N.A.K. Browne says. “The project is very much on track.”

Discussions are under way on the work share between Dassault and the state-run Hindustan Aeronautics Ltd. (HAL), which will manufacture the aircraft under licensed production.

As per the Medium Multi-Role Combat Aircraft (MMRCA) contract, estimated to be worth $12-20 billion, 18 of the 126 fighter aircraft will be bought in flyaway condition from Dassault and the remaining 108 will be manufactured by HAL later this decade.

“It was only a year ago that Dassault was selected as the L1 [lowest bidder] for acquiring the aircraft and the CNC [contract negotiation committee] was established to finalize the deal soon after. We want the deal to happen as early as possible for induction soon,” Browne said on the sidelines of the ninth Aero India show in Bengaluru.

Three French air force Rafales are at this year’s show, with two performing flight displays and one on static display.

Browne concedes that some defense programs take years to clear the negotiation committee stage. “We hope it won’t happen in the case of the MMRCA,” he says. There appear to be six or seven layers of bureaucratic approval before the MMRCA deal reaches the Cabinet Committee on Security, which has final say on the procurement.

Meanwhile, Dassault Aviation says it hopes to conclude the deal this year, with negotiations set to be taken up when French President Francois Hollande visits India next week.

“The ideal would be to sign it in 2013,” Dassault chief executive Eric Trappier told French media.

Meanwhile, HAL says it has begun advanced preparations to build a facility for assembling the Rafale fighters in India.

Rafale photo: Dassault