Rafale fighters for the IAF

Awaiting the Final Take Off

Update

June 7, 2016

/ By / New Delhi

Biz@India

June 2016

Narendra Modi had announced in April 2015, during a Paris visit, the intention to buy Dassault’s 36 Rafale in ready flight conditions

Narendra Modi had announced in April 2015, during a Paris visit, the intention to buy Dassault’s 36 Rafale in ready flight conditions

India and France are yet to finalise the last details of the 36 Rafale fighter jets contract that have to be delivered to the Indian Air Force (IAF) in full flight conditions by French manufacturer Dassault Aviation. This procurement is urgent and crucial for the two countries that are expanding their strategic partnership and aim at developing their Make in India cooperation in defence.

The Rafale is a top Multi-Role Combat Aircraft (MRCA) manufactured by French firm Dassault Aviation. It has been awaited for over a decade long procurement process by the Indian Air Force (IAF), to fill some urgent gaps in its capability in terms of combat and defence.

This Indian contract conclusion, after a memorandum of understanding (MoU) signed last January in New Delhi by French President François Hollande and Indian Prime minister Narendra Modi, is also of high importance for the French. They have to boost their Rafale exports, in order to maintain their production capacity and their technological base. They also have to amortise a programme that would be otherwise very costly if French taxpayers had to pay alone the bill of this prestigious but very expensive aircraft development, spanning through decades now.

Rafale is a technological jewel that will be very useful to the IAF, since it can perform many duties on an operational level and hence replace several different types of planes at a time. This twin-engine medium MCRA can be used for a whole panoply of combat roles, such as aerial reconnaissance, interdiction of a zone, air supremacy but also anti-ship strike, in-depth strike and nuclear deterrence, not to forget ground support. In the military aviation jargon it is “omnirole”, which is surely much needed by the IAF, in urgent demand for new capabilities.

India has a shortage of combat aircrafts and has to upgrade the quality of the existing fleet. Owing the touchy strategic context with some of its neighbours, like Pakistan or China, and the fact that it takes years if not decades to ramp up any air force strength, these issues have to be addressed as soon as possible.

Currently, the IAF capability is way below the authorised levels set in order to assure its combat and protection requirements. It has 25 squadrons (one squadron is 18 aircrafts), whereas it should have 45 squadrons. The other issue is the modernisation of the existing capability. Out of the actual 25 squadrons, 14 of them are close to retirement, comprising notably old Russian made MiG-21 and MiG-27 fighters.

According to defence experts, it may take the IAF more than a decade to reach back the necessary strength of 45 squadrons, as the induction of fully operational planes is a tedious process, from delivery and testing to pilots training and equipment. This is a strategic major concern for India, since at the same time China and Pakistan are developing full steam their own capability. And, if one may say so, time is flying: the IAF first expressed its need for new fighter jets long way back, in 2001.

Two Rafale deals since 2012

But why then is it taking so long to finalise Rafale fighters delivery? The story is an intricate one, involving defence matters, but also politics and finance, since at least 2007, when the selection process for new fighters really kicked off.

Going back one first step beyond, there is this 36 Rafale deal waiting to be wrapped up. Indian Prime Minister Narendra Modi had announced in April 2015, during a Paris visit, the intention to buy 36 Rafale in ready flight conditions, off the shelf, in a quick government-to-government process that does not require a long international tender. Then, when French President François Hollande came to India for a State visit last January, as a guest of honour for the Indian Republic Day, he signed with Modi a MoU adding at the time that “there are some financial issues that will be sorted out in a couple of days”.

Since then, the finalisation of the contract, not only in terms of value but also strategic issues regarding the scope of the offsets, involving technology transfers and manufacturing partly in India, have proven lengthier than announced in the optimistic atmosphere of Hollande’s visit. First, the price remains an issue. The Rafale is considered unanimously as an excellent fighter but it is expensive and India has been pushing for a reduction of the total bill.

France initially offered a global price tag of EUR 11 billion for 36 Rafales, including the complete weapon package and training, a 10 year maintenance programme and some offsets obligations of technologies to be invested in India, by Dassault or other French defence companies like Safran or Thales, in areas ranging from radar, missile technology and electronics. India continues to bargain and wants to push the price down to below EUR 8 billion, according to defence sources quoted by Indian medias.

Nevertheless, one has to be cautious with these sources and with the whole dossier. The conclusion of the deal is regularly said to be near and a “matter of a month or so” but complicated technical issues are yet in the way. Dassault Aviation – also well known for its private jets and its sister company Dassault Systems that develops 3D modelisation softwares – and other French groups will offer technologies in various areas to fulfil the duties in terms of industrial offsets. As a foreign company Dassault has to invest back a portion of the deal in India through technology, under the Defence Procurement Procedure (DPP).

Complicated technology assessment

However, that brings an element of further complication: the Indian ministry of defence has to evaluate these technology transfer elements in several areas, which is time consuming and can lead to a new delay.

This will not be the first one, if one traces the history. It was in 2007, when the selection process for new IAF fighters effectively kicked off, after the Defence Acquisition Council, constituted for overall guidance of the defence procurement planning process under the ministry of defence, approved the need to buy 126 new aircrafts. Dassault Aviation and its Rafale were then competing with five other international big aviation manufacturers for what was presented at the time as India’s biggest defence procurement deal.

 

French President François Hollande and Indian Prime Minister Narendra Modi at the India-France Business Summit, in Chandigarh, on January 24, 2016. Aiming at Make in India many developments, from defence to smart cities

French President François Hollande and Indian Prime Minister Narendra Modi at the India-France Business Summit, in Chandigarh, on January 24, 2016. Aiming at Make in India many developments, from defence to smart cities

In this international tender, apart from the Rafale, the bidders were Russia’s MiG-35, Sweden’s Saab’s Gripen, US giants Lockheed Martin’s F-16s and Boeing’s F/A-18s and Eurofighter Typhoon. The IAF tested those planes, evaluated the bids and then shortlisted the Eurofighter and the Rafale. The French fighter was finally chosen based not only on price but also maintenance cost as key criteria.

This initial Rafale deal was quite different from the one under current finalisation. It was worth around EUR 12 billion at that time for the acquisition of 126 aircrafts: 18 of them in fly-away conditions and the remaining ones to be manufactured in India by state owned Hindustan Aeronautics Limited (HAL), with an important technology transfer and Make in India element.

In 2012, Dassault Aviation and the Indian side started the negotiations to finalise the details of this huge contract but the pricing element and national elections in France and then in India slowed down the process. That is why India and France finally decided to go for a more direct process and to agree on 36 fighters of the shelf to be delivered to India, instead of 126 units. IAF pushed for it, since even after the agreement is finalised, it will have to wait around two years to get the first deliveries.

This would be excellent news for France. Rafale fighters have recently been exported to Egypt and Qatar and Dassault Aviation is focusing on deals with Malaysia and the United Arab Emirates (UAE), but once used by India, a heavyweight in defence deals, it could bring the French company some more international clients. And Dassault could still bid for new contracts involving more Make in India components, for the IAF, which will still be far from fulfilling its needs with this 36 planes deal.

On the operational level, the Rafale deal would also reinforce the ties between the IAF and its French counterpart, with much experience to share with French pilots that have conducted in the recent years combat operations in Syria, Libya or Iraq. This relationship is a long lasting one since India has already inducted in the past Mirage fighters, predecessors of the Rafale, also manufactured by Dassault Aviation. As a retired general from the IAF – who worked closely with the French on several types of fighters – puts it, “this strong man to man relationship is very important.” It would help the IAF to get the Rafale into operation quicker, with an average target of three years for the first ones, taking into account pilots training.

This long due contract would also cement further India and France pivotal defence and strategic partnership, ranging from common military exercises to air force, naval and antiterrorism cooperation.

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