India clears 950 million euro deal to procure 500 missiles from France

NEW DELHI, Jan. 4 (Xinhua) -- India on Wednesday cleared a 950 million euro deal to procure 500 air-to-air missiles from a French firm for the Indian Air Force (IAF)'s Mirage 2,000 aircraft fleet, reported Press Trust of India.

A Cabinet Committee on Security meeting chaired by Prime Minister Manmohan Singh on Wednesday cleared the deal to procure 490 MICA missiles manufactured by French firm MBDA for 950 million euros, the report quoted Indian Defense Ministry sources as saying.

The missiles would be deployed on 51 Mirage 2000 aircraft, which are already undergoing upgrades at French facilities under a 1.47-billion euro deal signed earlier this year.

Under the deal, MBDA would have to do offsets worth 30 percent of the deal meaning that they will have to invest 315 million euros back in the Indian defense sector, according to the report.

The Defense Procurement Procedure mandated that foreign vendors bagging deals worth over three billion rupees (60 million U.S. dollars) have to invest back at least 30 percent of the contract' s worth into Indian defense, civil aerospace and homeland security sector.

India signed a deal with French companies Thales and Dassault Aviation, which will take 10 years to carry out mid-life upgrade of IAF's 51 Mirage 2000 fighters.

Two aircrafts have already been flown to France for upgrades and the remaining would be modernized in India at Hindustan Aeronautics Limited (HAL) facilities in India.