India has imposed a penalty on MBDA for delaying fulfilling offset commitments in the Rafale aircraft deal signed between India and France to acquire 36 aircraft at Rs 59,000 crore. The sentence has been imposed and collected from MBDA under the new policy to tighten the rules on defaulting armament supplies, media reports said.

India had also signed an offset agreement with Dassault and MBDA. According to the agreement, half of the contract value (around Rs 30,000 crore) needs to be invested in India as offsets or re-investments. Under the deal, the balances are distributed in the next seven years from signing the contract, with no discharge in the first three years. India had received the first batch of 5 Rafale jets, manufactured by French aerospace firm Dassault Aviation, on July 29, 2020. The Rafale jets are India’s first significant acquisition of fighter planes in 23 years after the Sukhoi jets were imported from Russia.