Rafale Military and Industry Force Multiplier - Dr. Ajey Lele

Rafale Military and Industry Force Multiplier - Dr. Ajey Lele

India shares borders with two of its adversaries namely China and Pakistan with whom it has fought four and half wars (1999 Kargil conflict is also considered as half war) during last six decades. Indian establishment understands that even in this era of Asymmetric Warfare, India needs to remain fully prepared for any possible conventional war and/or nuclear threat scenario. India’s boundary and other political differences with both China and Pakistan still remain unresolved with no immediate solution in sight. Under these circumstances India has to remain prepared for any possible simultaneous militarily engagement with both China and Pakistan. In short Indian armed forces need to always remain fully prepared for ‘two-front war’ scenario. Indian Army, Navy and Air Force need to equip themselves accordingly.

For Indian Air Force (IAF), their planning, preparation, procurements, acquisitions and training need to match with the requirements of addressing a possible ‘two-front war’ scenario. As the strength of IAF’s fighter squadrons started depleting owing reasons like old/aging aircrafts, un-serviceability, accidents etc a need was felt to procure more aircrafts. The “sanctioned strength” of IAF gets mentioned as 42 squadrons The IAF projected a requirement for about 126 aircraft in 2001, when the strength was at 39.5 squadrons (presently, it is around 33 squadrons). The current IAF fleet consists of heavy and light weight combat aircrafts and hence the search for Medium Multi-Role Combat Aircraft (MMRCA) began.

The actual process however began in 2007 when the then defence minister approved the request for proposal for the purchase of 126 MMRCA. The defence ministry was to allocate US$$ 8.2 billion for the deal making it what famously known as ‘the mother of all deals’. After a through government (and public) scrutiny mainly six options emerged for the import of such aircrafts. It became clear that suppliers like Boeing F/A – 18E/F Super Hornet, Dassault Rafale, Eurofighter Typhoon, Lockheed Martin F-16 Fighting Falcon, Mikoyan MiG-35 and Saab JAS 39 Gripen. Finally, after intensive technical evaluations the bid was reduced to two main fighters namely Dassault Rafale and Eurofighter Typhoon. In January 2012, it was announced that Rafale was the best option due to its lower life-cycle cost. However, in the aftermath of the announcement, the deal was stalled due to transfer of technology issues that emerged with the move towards production of these aircrafts in India and officially India withdrew the tender on 30th July 2015.

However, when the Indian Prime Minister visited France, he issued a statement regarding an Inter Governmental Agreement to purchase 36 Rafales. This was followed by several rounds of negotiations and finally a deal was concluded on 23rd September 2016 for the purchase of 36 Rafale fighter jets at the cost of 7.87 billion Euros with a 50% offset clause and a 6% technology sharing component.

Along with this India will also procure: an unspecified number of Mica Air to Air missiles, SCALP air to ground missiles, Meteor beyond visual range missiles, Precision guided munitions. Furthermore, a Five-year maintenance and service contract has also been signed.

This deal is expected to be an additional benefit for the government’s Make in India mission. There is an attempt to extended to the concept of Make in India to Indian defence industry with the aim of pursuing military modernization through the production of advanced armament within the country and Rafael deal offers a good opportunity in that direction. It is perceived by many that this move could eventually began to process of a development of an indigenized defense armament industry in the country.

Various connected benefits are expected from this entire process of procurement. France has agreed to a 50% offset clause. By some calculations it is expected that owing to this arrangement minimum 3 billion Euros could flow into India. This money is expected to be used towards the resurgence of India’s stalled combat jet engine project. Dassault Aviation CEO Eric Trappier has also gone on record to state that ‘the French company is game for the 'Make in India' initiative and open to manufacturing the fighter aircraft in India if the plane is shortlisted for a bigger order’. Furthermore, a technology transfer may be set up wherein the French will help India with its Tejas aircraft project. As expected, if the third assembly line gets operational in India then, there is a possibility of the receiving some export orders for the fighters and future orders for the Navy and Airforce. Also, there exists a possibility that the opening of third assembly line could also support the production of a low cost variant of the Falcon executive jet for the Asian and Indian Markets.

There has been some amount of criticism to the deal too. Some experts are of the opinion that the compromise on the condition of the 50% offset offers almost no options of make in India. Also, there have been several concerns regarding the high price being paid. However, the government is proposing to mitigate these concerns by implementing various innovative measures. This deal is a major step towards connecting the domestic defence industry (with assistance from global players) with the Make in India agenda and is expected to play a major in India’s growth story.

Dr. Ajey Lele is a Senior Fellow at IDSA, New Delhi. He can be contacted at :ajey.lele@gmail.com