India May have to Fork out More for Proposed 110 Fighter Jets than Ever Before

For the 15 percent off-the-shelf purchase, the prices of these aircraft will surely come at international price.  But for the 85 percent of the aircraft to be made in India, price would vary depending on infrastructure set-up in India, investment by its Indian Partner, offsets and technology transfer. The total cost of the procurement could be between $18 billion to $20 billion.

The major contenders for the competition are likely to be American Boeing F/A-18 Super Hornet, Lockheed Martin’s F-16 Block 70, French Dassault Rafale, Swedish Saab’s Gripen, Russian MiG-35 and Eurofighter Typhoon. The new aircraft are intended to replace the IAF's MiG21 jets.

The unit prices for the fly-away aircraft excludes sunk costs such as research and development, supplementary costs such as support equipment, and future costs such as spares and maintenance.

Various price estimates are being offered by the contenders for the project. Indian publication, Indian Express mentioned the offered unit estimated prices of the Saab Gripen as Rs 455 crore ($65 million), and Lockheed Martin F-16 for Rs 380 crore ($55.4 million) for manufacturing in India. However actual prices should depend on the requirements of the Request For Proposal (RFP) and final price negotiated with the successful bidder.

Based on the recent deals of the competitor sales of fighter aircraft to their customers and their estimates are as follows.

Dassault Rafale:

Qatar in December 2017, signed a deal to buy 12 Rafale aircraft from Dassault in fly-away condition, with an option to buy additional 36 aircraft for $1.3 billion costing an approximate $103 million each.

The Indian deal procure 36 Rafale fighter jet in the $8 billion contract included cost of Meteor, SCALP missiles from MBDA, spares and maintenance costs and India specific enhancements would come up to about $160 million each.

Eurofighter Typhoon:

In December 2017, Qatar agreed to buy 24 Eurofighter Typhoon fighters for an approximate $8 billion along with weapons that included MBDA-built Brimstone 2 ground-to-air and Meteor beyond-visual-range air-to-air missiles as well as Raytheon’s Paveway IV precision-guided bombs and training package costing $272 million per aircraft.

Lockheed Martin F-16 Block 70:

Lockheed Martin won $1.1billion Foreign Military Sales (FMS) contract to supply 16 F-16 Block 70 fighter aircraft, the newest generation of Fighting Falcon, to Bahrain on June 23, 2018. The contract will cost $70 million each without associated weapons package.

Boeing F/A-18E/F Super Hornet:

In April this year, Boeing won a foreign military sales contract worth over $1.5 billion to supply 22 single-seat ‘E’ and six two-seat ‘F’ variants to the Kuwait Air Force costing $53.5 million each. The sale does not include any life cycle costs and weapon costs.

Saab Gripen:

The Brazilian MoD signed a $4.68 billion contract with Saab for development and production of 28 single-seat and eight two-seat Gripen NG fighters with substantial technology transfer costing an approximate $130 million for each aircraft.

Unit prices of Russian MiG-35 are unknown as the fighter is pretty new and has no export customers apart from the Russian Armed Forces.

Table: Actual Per Unit Prices of Fighter Jets