Posted by: John Elliott | April 10, 2015

Modi softens on ‘Make in India’ to get French-made jets into depleted Air Force

Dassault coup to make 36 Rafale fighter jets in France not India

Narendra Modi has taken India’s defence industry by surprise with a totally unexpected decision to buy 36 Rafale fighter jet aircraft (below), probably costing around $4.5bn, from Dassault Aviation in a deal that is being negotiated directly between the Indian and French governments.

rafale-fighter-jet-2Modi is on an official visit to France. He said after holding talks with President Hollande in Paris on a range of subjects that included nuclear energy co-operation and Euros 2bn French investment into India, that he had asked for 36 Rafale multi-role combat aircraft (MMRCA) “in fly-away condition as quickly as possible”.

This means that the planes will be completely made in France, which is a temporary blow for Modi’s Make in India campaign that has been relying on defence orders for early successes that have yet to materialise.

The Indian Air Force (IAF) however is seriously depleted of serviceable fighter jets, just as other branches of India’s defence forces are deplorably under-equipped. It has only 32 working squadrons compared with a requirement of about 40 and the total is expected to come down maybe to as low as 20 – half what is needed – within three years when old Russian MiG and other aircraft are taken out of service.

That has led Modi to cut through the red tape of defence acquisition procedures to initiate a quick deal after three years of tortuous negotiations to buy 126 Rafales have failed to reach agreement. The first 18 of those planes would have been made in France, instead of the new 36 (two squadrons) figure.

Negotiations will, it is understood, now continue separately for 108 aircraft to be made as originally planned in Bangalore at Hindustan Aeronautics (HAL), the Indian public sector’s aircraft builder. The deal was originally priced at around $13bn when the Rafale was selected by India in 2012, but the figure demanded by the French company has risen to $18-20bn. It is not now clear how urgently India will pursue these negotiations, though there seems little operational or financial logic in having only 36 aircraft in the airforce.

Narendra Modi arrives in Paris

Narendra Modi arrives in Paris

The proposed purchase of 36 “fly away” aircraft, for delivery after two years or so, can be presented as an example of Modi’s willingness to spring unconventional surprises when that is in the national interest – and clearly there is an urgent need to buy aircraft quickly if the IAF is to look a viable fighting force.

But it is also a coup for France and Dassault, which have played hardball since 2012 when the Rafale was controversially picked by India for the 126 fighter order after five years of tenders and evaluations, beating the European EADS consortium’s Eurofighter. Three other contenders – Boeing’s F-18 and Lockheed’s F-16 jets from the US, and Sweden’s Saab Gripen – were elimitated earlier.

Reliance Industries, run by Mukesh Ambani, was named by Dassault as an Indian partner for part of the production, even though it had no prior engineering manufacturing experience. There was also to be the usual production tie-up with Hindustan Aeronautics (HAL), the government-owned aircraft manufacturer and assembler that had a poor reputation on costs and delivery times. Dassault refused to accept liability for HAL-produced aircraft in terms of delivery times or quality, saying it should be liable its work, and that stalled the negotiations.

A.K.Antony, the Sonia Gandhi loyalist who was the non-performing defence minister in the last government, could not cope with such pressures and ducked taking a decision, so the Modi government inherited tortuous negotiations that were stuck in bureaucratic rules and procedures, and an air force urgently needing aircraft.

The new defence minister, Manohar Parrikar, has been pushing for an order to be placed but Arun Jaitley, the finance minister, has been saying that there are not sufficient funds available for 126 aircraft. That led India’s defence industry and most analysts to believe that the negotiations were going nowhere and that there would be no Rafale contract.

Indian-Prime-Minister-Narendra-Modi-with-the-President-of-France-Mr.-Francois-Hollande-in-Paris-on-April-10-2015.-300x232

Narendra Modi and Francois Hollande before their talks

Instead, Modi took the decision to do the new government-to-government negotiated deal, which is the usual structure for defence contracts with Russia and is sometimes done with the US.

Earlier today it was widely reported that he would ask for 63 jets. It is not clear whether that was incorrect or whether the number came down during the talks, possibly to blunt criticism that the deal went against the Make in India policy..

The government can now try to push down the price of the aircraft because Dassault desperately needs work at its French factories for the Rafale – it has no overseas orders apart from 24 aircraft for Egypt.

It will probably have to face renewed criticism that the Rafale is not the best choice for the IAF because of its high cost and its lack of other significant orders. The US, which was seriously annoyed when Boeing and Lockheed aircraft were dismissed, will probably argue for its aircraft to be reconsidered. Others will argue that both the Saab Gripen and even the Eurofighter would be lower-cost alternatives.

Many experts have been puzzled why India chose the Rafale in the first place. Today’s developments do nothing to clear the air on that.


Responses

  1. Is the Rafael for the IAF ? Can an Indian fly a plane or a fighter jet ?

    The IAF was almost wiped out by the PAF,in the 1965 war – but the PAF had a pre-emptive strike, so we can ignore it.

    Let us also ignore the multiple air crashes of the IAF,in the Indian Heartland,and the Sino-Indian Border !

    Let us look at History !

    The Hindoo Hero,Man God,Hero God is RAMA ! As per the Valmiki Ramayana,his wife Sita,was kidnapped by the King of Lanka (a strategic ally of PRC),and loaded onto to a aero-vehicle and taken to Lanka

    Rama the Man God neither saved his wife,nor heard her cries for help.

    Rama the Man God could not get a plane,to intercept or rescue his wife – for 12 YEARS.

    Rama the Man God,was roaming the jungles for 12 YEARS WITH APES AND BABOONS,trying to make an army to go to Lanka !

    Rama the Man God,used an army of apes,to make a BRIDGE TO LANKA.Rama the ManGod,could not even make a ship,to reach Lanka !

    PLA is to note that Rama the Man God used Apes,to make a bridge to Lanka,and also,to fight the Lankans.RAMA KNEW HE WORTH OF THE INDIANS – and so,he USED APES.

    HOW CAN THESE PEOPLE FLY RAFAELS OR RUN NUKE SUBS ? They are the offsrping of Rama !

    What did Seeta say of Rama ? She called him an impoteny pansy !

    Book II : Ayodhya Kanda – Book Of Ayodhya Chapter[Sarga] 30

    किम् त्वा अमन्यत वैदेहः पिता मे मिथिला अधिपः | राम जामातरम् प्राप्य स्त्रियम् पुरुष विग्रहम् || २-३०-३

    “What my father, the king of Mithila belonging to the country of Videha, think of himself having got as so-in-law you, a woman having the form of a man?”

    The IAF and Army are the offsprings of Rana !

    Indians do NOT realise,that the monkeys of Rama,cannot fight a war in Ladakh, for 5 reasons

    There are no Trees in Galwan
    There are no banana plantations in Galwan
    There are no bananas in Galwan
    It is too cold for monkeys to survive in Galwan
    The Mongols have great experience in taming and managing apes and stallions – from before the time of Genghis Khan

    The PLAF and PLN will destroy the IAFand the Indian Navy

  2. John, I would say some movement. It is also a message that he means business right or wrong. This action is a message to the world that we do business at our terms. About the Rafale being good or bad is conjectural. two experts only agree over their dead bodies. In west they play ball after a decision, here they stall progress. Channel tunnel would not have been built had Maggie not put her foot down the choice of design and contractors. Here we are a each others throats, because we get experts dime a dozen. Make in India would be pipe dream for sometime, so be it. We have to be Militarily and Economically strong is a clear message.

    However, to go with Reliance would be disastrous. That would be cronyism to the core. Reliance would wean away all the good guys at HAL at 10 times the salary & would do nothing for years. All this PM has to do is improve governance of PSUs along side better quality of life with incentives as good or near Reliance. This to my mind is also a message to HAL and their ilk that get your act together or else? I would say Positive if Reliance is not the beneficiary. They could at best be component suppliers. Cameroon et al too needs to introspect like the rest of the world. Very very clear message


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