Now, for the most of it, Rafale was selected on the basis of cost and technical specifications. Cost goes beyond the nominal price of course, it also takes into account mid-life servicing and technology transfer, a rather complicated calculation indeed. Nonetheless, Rafale was also chosen because France has been a steadfast ally of India since Independence, with the warmth growing over the last decade.
During Kargil, France was one of three countries that stood firmly behind India and did not indulge in Indo-Pak politics, the other two being old allies Russia and Israel. Virtually the entire non-nuclear submarine programme is based on the Scorpene submarines from France. France's Areva has been asked to build six nuclear reactors in India. Diplomatically, France, a member of the P5, unequivocally supports India's bid for permanent membership at the UNSC.
Clearly, Rafale brings with it not just an excellent fighter jet (being similar in configuration to the Mirage, integrating it with the IAF will not be very hard) but also diplomatic dividends. Interestingly, it has come as a shot in the arm for President Nicolas Sarkozy, who is looking at a massive defeat this May. Such massive deals always have a strategic component in them. The Rafale was the right choice for the IAF, bringing with it a worthy partnership and badly-needed technology to the Indian defense industry.
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