On September 23, 2016, the Indian government concluded an Inter-Governmental Agreement (IGA) with France for the purchase of 36 Rafale fighter jets at a cost Euro 7.87 billion. This is the first fighter aircraft deal since the purchase of Sukhois from Russia in the late 90’s.
The deal, signed between Defence Minister Manohar Parrikar and his French counterpart Jean Yves Le Drian, came after 17 months of tough negotiations.
What is Rafale aircraft?
Rafale is a twin-engine Medium Multi-Role Combat Aircraft (MMRCA) manufactured by French company Dassault Aviation. Rafale fighters are capable of performing a wide-range of combat roles such as air supremacy, interdiction, aerial reconnaissance, ground support, in-depth strike, anti-ship strike and nuclear deterrence.
Why was India Interested in purchasing Rafales?
As an endeavour to revamp Indian Airforce fleet by introducing MMRCAs, India had several other choices in hand that came from other international aviation manufacturers.
The Initial bidders were Lockheed Martin’s F-16s, Boeing’s F/A-18s, Eurofighter Typhoon, Russia’s MiG-35, Sweden’s Saab’s Gripen and Rafale.
The IAF closely tested and analysed the bids and Eurofighter and Rafale got shortlisted. Dassault bagged the contract, as it was the lowest bidder and the aircraft were said to be easy to maintain.
When did the procurement process begin?
It was back 2001 that talks were going to bring in intermediate medium-weight fighter jets. But the process began in 2007. The Defence Acquisition Council, headed by then Defence Minister A.K. Antony, approved the Request For Proposal to buy 126 aircraft in August 2007. This kick-started the bidding process.
Why this delay?
India and France witnessed changes in their respective governments when the Rafale deal was taking place. Even while signing the agreement, both the sides could not reach a deal on the price of the jets. The initial plan of buying 126 jets was scaled down to 36, in ready condition.
Controversy of the deal
The Rafale deal was hanging because of protracted price negotiations. French had made an opening offer of Euro 12 billion in May last year when the negotiations began, according to sources. The French offer came down to Euro 8.6 billion on the midnight of 25-26 January when French President François Hollande was in India as a chief guest for the Republic Day celebrations. It was alleged that Dassault Aviation had refused to transfer technology, increased the price in violation of the original tender, and refused to take charge of timely deliveries for the aircraft produced in India.
But the Indian side wanted the price to be reduced further. It was in May this year, sources said, that the two sides finally agreed at a price of Euro 7.878 bn. This includes the cost of 36 plain-vanilla fighters, the full weapons package, performance-based logistics, India-specific enhancements and associated supplies.
Significance of this deal
India chose Dassault over its traditional partner Russia’s MiG. It also ignored U.S.’ Lockheed, at a time when India and U.S. were aiming for closer ties. Procurement of combat aircraft is long overdue for the Indian Air Force. Further delay can only make things worse. The deal also is a boost for Dassault group that hopes to meet its revenue targets. If India inducts these jets in its military fold, other nations could express its willingness to buy Rafales.