France eyes bigger share of Indian defence market

In a meeting with Prime Minister Narendra Modi in New Delhi on December 17, French defence minister Florence Parly discussed Rafale sales (Photo: PIB)

Ever since the controversial government to government deal to buy 36 Rafale fighter jets that was announced out of the blue by Narendra Modi during his first visit to Paris as Prime Minister in 2015, France has been eyeing a much bigger order from India.

For France, Modi’s decision to sidestep all procedures involved in signing a purchase deal with a company by engaging in a direct deal with the government, was definitely a welcome step as it involved precious little transfer of technology, compared to the deal for 126 Rafales that Hindustan Aeronautics Limited had been negotiating with Dassault for years.

The talks had been stuck on the complete handholding that was involved in manufacture of 108 Rafales in India, while only 18 would come in fly-away condition. Dassault had been dragging its feet on transferring the technology and complete local manufacture of Rafales as it involved setting up an entire vendor ecosystem since Dassault works hundreds of vendors that supply various parts or technologies that go into the making of a fighter jet. Most of the vendors were too small and too scared to set up base in India simply for one order, however big it may have been.

When your correspondent asked some of the vendors who had been asked by Dassault to accompany them to India, they said that they had either refused or asked Dassault for guarantees over their investments in India that were not acceptable to the company.

Thus, by bypassing HAL and its conditions for actually making the jets in India, Dassault was happier to be able to sell even a smaller lot of jets to India, at a far higher price but without any headaches that came with technology transfer to India. And indeed Modi has set a precedent by scrapping a deal that actually involved a 100 pc transfer of technology and his hyped up ‘Make in India’ and instead he settled for a deal that helped his crony capitalist friends as much as the French, but clearly sacrificing Indian interests and Indian capabilities in this key domain.

Thus, now Dassault and France would be happier to continue down the same road of smaller follow-on order from time to time that would get them the price of their asking and with little, if any strings, attached.

It is not just Rafales that Parly was flogging on her visit. France is also keenly awaiting India to decide on a major order for more submarines now that the first order for six Scorpene submarines, that are being manufactured by Mazagaon Docks Limited in Mumbai, is well on its way to completion.

Moreover, the situation in India’s neighbourhood has entirely changed in the decade since the first Scorpene deal was signed. Now, with India’s aspirations to counter the Chinese in the Indo-Pacific and join in along with traditional allies of the United States in the region, notably Japan, South Korea and Australia in ranging against China, India needs to significantly enhance its naval forces, which have far too few vessels and have lost a significant share of their blue-water capabilities due to lack of ships and submarines.

Indian Navy is currently half of Chinese Navy, which outguns it heavily qualitatively as well as quantitatively in personnel as well as vessels. India for instance has only 17 submarines, while China has more than 5 times as many, with 79 submarines, including nuclear weapons capable ones.

Keenly aware of the Indian weaknesses and the need to buy more equipment, the French are keen on pushing its systems including submarines and helicopters, for land as well as sea use. In her speech during a virtual conversation on India-France cooperation to defend a rules-based Indo-Pacific, organised by Ananta Centre, a New Delhi-based think tank, Parly said that France was ready to meet any requirements from India as it works to bolster the Make in India initiative by integrating Indian manufacturers into global supply chains.

Without naming it, Parly said that China’s behaviour in the Indo-Pacific region was becoming more and more aggressive and that France sought to find a “delicate balance” between addressing such behaviour and cooperating with China on issues such as climate change and trade.

“I am very happy that the Indian Air Force is satisfied with its Rafales and we are very proud that despite Covid-19, the 36 aircraft will be delivered on time according to the contract. It’s a real achievement,” Parly said, confirming informal reports that had been doing the rounds of Paris for over a year that France was keen to sell more Rafales to India.

She also repeated that France was committed to backing the “Make in India” initiative, especially for defence hardware. “France, more than any other country, understands the necessity of the Indian content and we are fully committed to the Make in India initiative as well as to the further integration of Indian manufacturers into our global supply chains,” she said.

During her 2-day visit to India, her fourth since 2017, in a meeting with Indian defence minister Rajnath Singh, Parly discussed overall bilateral defence relations between the two countries. She also met

National Security Advisor Ajit Dhoval, with whom she discussed the situation in Afghanistan and Indo-French cooperation in counter-terrorism.