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==Background==
{{Further|Indian MRCA competition}}
On 31 January 2012, Indian Ministry of Defence announced that [[Dassault Rafale]] had won the [[Indian MRCA competition|MMRCA]] competition to supply Indian Air Force with 126 aircraft along with an option for 63 additional aircraft. The first 18 aircraft were to be supplied by [[Dassault Aviation]] fully built and the remaining 108 aircraft were to be [[Licensed production|manufactured under license]] by [[Hindustan Aeronautics Limited]] (HAL) with transfer of technology from Dassault. Rafale was chosen as the lowest bidder based on life-cycle cost, which is a combination of cost of acquisition, operating cost over a duration of 40 years and cost of transfer of technology.<ref>{{cite news |last1=Pandit |first1=Rajat |title=French jet Rafale bags $20bn IAF fighter order; India 'briefs' losing European countries|url=https://timesofindia.indiatimes.com/india/French-jet-Rafale-bags-20bn-IAF-fighter-order-India-briefs-losing-European-countries/articleshow/11706551.cms |work=The Times of India |date=1 February 2012}}</ref> The negotiations with Dassault dragged on over disagreements on warranty for aircraft produced by HAL. India wanted Dassault to ensure the quality of aircraft produced by HAL, but Dassault refused to do so.<ref>{{cite news |last1=Prusty |first1=Nigam |last2=Kotoky |first2=Anurag |title=Government's $15 billion Rafale deal faces delays: sources |url=https://in.reuters.com/article/india-rafale-deal/governments-15-billion-rafale-deal-faces-delays-sources-idINDEE93403Z20130405 |work=Reuters |date=5 April 2013}}</ref><ref>{{cite news |last1=Datt |first1=Gautam |title=HAL's poor track record overshadows IAF plans to buy 126 Dassault Rafale jets |url=https://www.indiatoday.in/india/north/story/rafale-jets-hal-hindustan-aeronautics-limited-iaf-dassault-aviation-158290-2013-04-05 |work=India Today |date=5 April 2013 }}</ref>
In January 2014, it was reported that the cost of the deal had escalated to $30 billion ([[Indian rupee|₹]]1,86,000 crore), with each aircraft costing $120 million (₹746 crore).<ref>{{cite news |last1=Sagar |first1=Pradip R |title=dna exclusive: 100% price escalation on Rafale fighter aircraft to Rs 1.75 lakh crore likely to dent IAF's strike capability |url=https://www.dnaindia.com/india/report-dna-exclusive-100-price-escalation-on-rafale-fighter-aircraft-to-rs-175-lakh-crore-likely-to-dent-iaf-s-strike-capability-1957107 |work=Daily News and Analysis |date=26 January 2014}}</ref> In February 2014, defence minister [[A. K. Antony]] said that the procedure of calculation of life-cycle cost was being re-examined and the contract could not be signed in fiscal year 2013-14 due to budgetary constraints.<ref>{{cite news |title=Fighter jet deal put off to next fiscal due to budget constraints: Antony |url=https://www.thehindubusinessline.com/economy/policy/fighter-jet-deal-put-off-to-next-fiscal-due-to-budget-constraints-antony/article20722943.ece1 |work=The Hindu Business Line |date=6 February 2014 }}</ref> In March 2014, HAL and Dassault signed a work share agreement to manage logistics of license manufacture.<ref>{{cite news |last1=Gokhale |first1=Nitin |title=A big step in India's Rafale jet deal with France |url=https://www.ndtv.com/india-news/a-big-step-in-indias-rafale-jet-deal-with-france-552565 |work=NDTV |date=3 March 2014}}</ref> After the [[2014 Indian general election]] in April–May 2014, [[National Democratic Alliance (India)|National Democratic Alliance]] led by [[Bharatiya Janata Party]] took control of the government from [[United Progressive Alliance]], led by the [[Indian National Congress]].
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