French President Francois Holland’s visit helped create an air of finality to the deal for purchasing Rafael fighter jets. All that remains, we are told is six more months of hard bargaining over prices. By then the Narendra Modi government would have completed two years in office and come no nearer to its predecessor in resolving the question of steady drawdown of India’s fighter aircraft fleet. For years, the joint development and production plan with Russia for the next generation of fighter aircraft too has been the subject of intense negotiations. The light combat aircraft, after decades of being under development, went on its first outing to the Bahrain air show. But it cannot undertake the requirements of the heavier fighter aircraft. If the negotiations over Rafael drag on, Modi will have himself to blame for failing to reverse the attrition in India’s fighter fleet. Almost as if on impulse, he placed an order for 36 Rafael jets on the eve of his first visit to Paris last April. Rafael had emerged as the best of the six fighters that had competed for the Indian Air Force’s tender for 126 fighters. For the past three years Defence Ministry officials had been conducting intense haggling-cum-negotiations with the company. The entire exercise went topsy-turvy when Modi announced the order for 36 fighters. Exasperated officials had to begin negotiations all over again. This time they are trying to get the old price for a smaller order. It is not just about Rafael. The Make-in-India policy for defence equipment was announced with fanfare without one crucial component — the criteria for the foreign strategic partner. The industry is not happy with the proposal to restrict one strategic partner to one project. Once this is overcome, the next hurdle will be the defence public sector workers opposing the entry of the private sector. Several other major projects such as plans to jointly build warships, nuclear submarines and helicopters are also facing challenges. The bigger challenge is there are no export markets or civilian derivatives for these products. The government will have to become realistic and prioritise products that can be realistically built in India at a comparable cost.
India for fresh price quote on Rafale jets
New Delhi unwilling to seal deal till cost is reduced
Ajay Banerjee,Tribune News Service,New Delhi, January 27
India and France are looking at the possibility of sealing the deal on 36 Rafale fighter jets over the next two months even as New Delhi has sought a fresh ‘price quote’ on the planes. India has asked the manufacturers of Rafale, French company Dassault Aviation, to come up a quote on pricing, it is learnt.During the just-concluded three-day visit of French President Francois Hollande, a Memorandum of Understanding was signed as the first step towards signing a formal inter-governmental agreement (IGA).Only pricing remains to be decided and specific aspects are being discussed on how price can be reduced, a top functionary said. There is no reason it can’t be done in four to six weeks, he added.Last-minute efforts to ink the IGA for the purchase of the jets during Hollande’s visit had come to naught as New Delhi was not happy with the price being offered.“It was way too expensive. The price has come down from earlier but not to our expectations. Let them (the French) do their exercise of costing and come back with a fresh offer,” a senior functionary said.The French President was quoted as having cited a figure of US $9 billion for the 36 jets, including two types of missiles (air to ground and air-to-air), training of pilots, bombs and base facilities of the planes. It would translate to Rs 59,000 crore or Rs 1,630 crore per piece. Indian negotiators are willing to pay some US $7 billion or Rs 46,000 crore (Rs 1,180 crore per piece).In the meantime, the Indian Air Force has reminded the Ministry of Defence that it needs at least 80 Rafale-type multi-role combat fighter jets to be battle-ready in the next few years. The Tribune had on June 2 reported how the IAF was uneasy with the number of jets ordered. As of now, the IAF has 35 fighter jet squadrons (having 16-18 planes each) against its projected requirement of 42.