Alarmed that the much-delayed $20-billion deal for 126 medium multi-role combat aircraft (MMRCA) may be deferred further, a team of senior officers from France’s defence ministry and aircraft manufacturer Dassault are to visit India shortly to expedite the procurement process and to ensure that the deal is on track.
Dassault’s Rafale fighter was selected to supplement the Indian Air Force’s ageing fleet over competition from the Boeing F/A-18E/F Super Hornet, Eurofighter Typhoon, Lockheed Martin F-16 Fighting Falcon, Mikoyan MiG-35 and Saab JAS 39 Gripen..
Sources told FE, “The negotiations for the MMRCA, which is part of the long-term integrated perspective plan (2012-27) with the French company Dassault, is going on but at a very slow pace as it is complicated process. The French government and the company have expressed concern over the delays. And they are keen that the deal gets finalised at the earliest. However, the whole process will take its own time to be completed.”
Citing some hurdles in the final round of negotiations, sources have indicated that besides the costs, it is the clause on transfer of technology that is causing more delays.
Given that Dassault has no foreign customers for the Rafale and badly needs the export orders, careful negotiation could reduce cost, but so far that does not seem to have happened.
As reported by FE earlier, cost has been an issue since the start besides the company’s reluctance to transfer sophisticated technology to India and meet offsets requirements. In the last several months, questions have been raised by Dassault regarding the role of Hindustan Aeronautics in the MMRCA. Moreover, the French company is unwilling to be held liable for the quality, on-time and on-cost delivery of the 108 aircraft to be licence-produced at HAL. However, according to HAL officials, all issues with Dassault have been resolved. As things stand, given Dassault’s financial situation the company cannot afford any business risk.
According to official sources, the negotiations have dragged on for so long also due to issues related to MMRCA’s 50% offset requirement and transfer of technology. The French, it appears, are unwilling to transfer cutting edge technology such as that of the electronically scanned AESA radar while citing lack of maturity of the Indian defence industry to absorb such critical technologies as an excuse.
There is also a strong lobby of small and medium French enterprises that is against industrial offsets and sees it as a threat to the competitiveness of the French defence industry.
It is the Indian Air Force’s threat perception in the face of its depleting squadron strength · down from the sanctioned 44 squadrons to about 34 squadrons at present · that led it to look for new aircraft to replace its ageing combat fleet.