Three Rafales re­turn­ing to Aero In­dia, good news in store?

SP's MAI - - SP’S EXCLUSIVES -

Three Ar­mée de l’Air Rafale multi-role fighters will be mak­ing a re­turn to Aero In­dia this year, just seven months since their last dash into the coun­try for the Indo-French Garuda-V joint air ex­er­cise in Jodh­pur. While Das­sault Avi­a­tion and the Hol­lande Gov­ern­ment have done ev­ery­thing so far pos­si­ble to con­clude an early con­tract, the long-wind­ing medium multi-role com­bat air­craft (MMRCA) isn’t over yet. Three full years af­ter South Block elim­i­nated the Eurofighter Ty­phoon in favour of the French Rafale, ne­go­ti­a­tions stum­ble through a tricky fi­nal phase that shows no signs of be­ing smoothe.

The re­al­ity is, since at least mid-2013, ne­go­ti­a­tions have re­mained largely stalled over cru­cial is­sues that in­clude: Re­spon­si­bil­ity for the 108 air­craft in terms of li­a­bil­ity, dam­ages and at­ten­dant clauses on ac­cess, in­spec­tion and post-man­u­fac­ture testing. Das­sault’s con­cern is that the Hin­dus­tan Aero­nau­tics Ltd (HAL) hasn’t built up any of the fixed as­sets which the com­pany feels would be the min­i­mum re­quire­ment to begin dis­cussing the modal­i­ties of the kind of li­a­bil­ity HAL wants Das­sault to take on for the jets built in In­dia. With the last 60 air­craft to be as much as 90 per cent ‘Made in In­dia’, the ball is ap­par­ently in HAL’s court, with Das­sault telling the Cost Ne­go­ti­a­tion Com­mit­tee (CNC) that it still awaits fig­ures from HAL on the fi­nan­cial specifics of the li­a­bil­ity it is seek­ing to trans­fer to Das­sault. Das­sault has asked HAL to clar­ify the specifics of any sim­i­lar li­a­bil­ity pa­ram­e­ters in com­pa­ra­ble deals like HAL’s Su-30MKI pro­duc­tion line on li­cence from Rus­sia. Modal­i­ties of li­censee/li­cen­sor and the man­ner in which the fi­nal agree­ment sets down their roles. Things are ac­tu­ally more con­tentious than most be­lieve/re­port. Das­sault has even flagged up is­sues with ac­cess to HAL’s fa­cil­i­ties. A French del­e­ga­tion em­pow­ered to smoothen out ne­go­ti­a­tions is un­der­stood to be in the process of at­tempt­ing to smoothen out is­sues that keep the deal from an early con­clu­sion.

The other re­al­ity is that ne­go­ti­a­tions are es­sen­tially tak­ing place in a whole new po­lit­i­cal at­mos­phere where two pow­er­ful twin im­per­a­tives over­ride nearly ev­ery­thing else: (a) the need to economise given ma­jor fund crunches for de­fence pro­cure­ment, and (b) the Prime Min­is­ter-led ‘Make in In­dia’ con­cept that’s been ag­gres­sively pushed through at ev­ery op­por­tu­nity. The Aero In­dia show this year, in fact, is themed around ‘Make in In­dia’.

A top of­fi­cial at the Das­sault Avi­a­tion in France says, “The com­pany re­mains op­ti­mistic. We have a re­la­tion­ship with the In­dian MoD and IAF that spans many decades. De­lays and ne­go­ti­a­tions are part of due process and must be com­pleted to the sat­is­fac­tion of all con­cerned. While we would very much like to see an early con­clu­sion to the ne­go­ti­a­tions, we fully re­spect In­dian due process, which we be­lieve is among the best in the world. We would also like to recog­nise that no fighter com­pe­ti­tion has gone into the in­ner com­plexi- ties of con­tract­ing like this one has. It has set down sev­eral bench­marks for fu­ture pur­chases, be­yond fighter jets too.”

The ‘Make in In­dia’ theme has al­ready coloured Das­sault’s public ap­proach in the last 12 months. “Rafale In­ter­na­tional sees the MMRCA pro­gramme as much more than a mere ac­qui­si­tion process. It is the op­por­tu­nity to de­velop a large-scale strate­gic part­ner­ship and industrial co­op­er­a­tion be­tween In­dia and France cov­er­ing in-depth tech­no­log­i­cal and pro­duc­tion co­op­er­a­tion. The of­fer is also to­tally sup­ported by the strong po­lit­i­cal com­mit­ment of France to­wards In­dia in all fields of de­fence co­op­er­a­tion,” the com­pany says. It adds, “This is clearly demon­strated by the full clear­ance given by the French au­thor­i­ties to the ex­port of Rafale air­craft to In­dia and to the trans­fer of the pro­duc­tion li­cence as well as all re­lated tech­nolo­gies. Our pro­posal is based on the strate­gic out­look of open­ing of a unique op­por­tu­nity for tech­no­log­i­cal and industrial co­op­er­a­tion be­tween France and In­dia, ful­fill­ment of all the In­dian Air Force’s op­er­a­tional re­quire­ments, with the Rafale and pro­vid­ing a solid and well struc­tured pro­gramme to en­sure en­tire se­cu­rity to the In­dian in­vest­ment.”

For France and Das­sault, the MMRCA com­pe­ti­tion is im­pos­si­ble to loosen fo­cus over. The costs are sim­ply way too high: France has never got­ten closer to sell­ing the Rafale to an­other coun­try (the In­dian deal comes even closer than what France man­aged in Brazil, fi­nally los­ing out there too). Whether three­year-long ne­go­ti­a­tions in In­dia re­sult in a deal have a di­rect bear­ing on the fu­ture of the Rafale pro­gramme and its viability as an ex­tend­able prod­uct in the dwin­dling in­ter­na­tional mar­ket for fighter jets. In ev­ery way, the Rafale’s fight in In­dia is a fight for sur­vival and rel­e­vance. In many other ways, sus­pense over the In­dian deal has drawn so many re­sources in terms of the French Gov­ern­ment’s in­flu­ence and at­ten­tion, has placed some­what in abeyance France’s plans for a fu­ture fighter—there are ques­tions over whether France can even af­ford to build new fighters from scratch if it can­not amor­tise what it has spent on the Rafale pro­gramme. In­dia, ob­vi­ously, is well aware of the po­ten­tial im­pact on France. That may have some­thing to do with the pres­sure tac­tics be­ing ex­erted in the form of ‘Plan B’ be­ing floated by the po­lit­i­cal lead­er­ship in the run up to fi­nal ne­go­ti­a­tions.

Das­sault doesn’t need an Aero In­dia for clar­ity on the pro­gramme. Its three Rafales will en­thral crowds, and French pi­lots may be forced to con­duct a hand­ful of VIP flights with IAF per­son­nel and oth­ers. The show it­self is only a plat­form for the com­pany to un­der­score its com­mit­ment to In­dia and the Rafale deal.

What hap­pens ahead of Prime Min­is­ter Modi’s visit to France in April will be cru­cial, and all eyes will be on whether three-year-long ne­go­ti­a­tions have fi­nally yielded a vis­i­ble fin­ish line.

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