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