India's agreement to buy 126 Rafale fighter jets from France's Dassault Aviation, is of the "highest priority" in the budget for the upcoming financial year that begins in April, 2013 Air Chief Marshal NAK Browne said on Thursday.
The French machine was shortlisted for exclusive negotiations over a year ago after a hotly contested bidding war with rival manufacturers, but India is still to finalise the $10.4 bn deal. France's Dassault Aviation hopes to conclude its $12-billion deal to sell Rafale jets to India this year, with negotiations set to be taken up by President Francois Hollande next week.
The deal will have to pass through "six or seven layers" of vetting before being presented to the finance ministry and the cabinet committee on security.
The French group has also formed a joint venture with the Indian conglomerate Reliance, which has no former military production experience but will be involved as a supplier.
Said the air chief in response to a question that, “The contract between Dassault and Reliance does not bother us, as per the RfP production has to be carried out in India jointly with Hindustan Aeronautics Limited."
In response to a question, Browne, who earlier in the week had called for imposing financial penalties on laggard design and production centres said, “World over when you slip in the production time there are big penalties. These need to be introduced here in India. We need to increase the liabilities."
"We need to execute financial penalties in case of poor performance of work centres by withholding payments and recovering some of the money spent."
Apart from ‘tweaking’ the present project management practices of the public sector agencies that design and manufacture military hardware, “We have to stop importing and start doing things more and more indigenously” as the IAF moved to become a force to reckon with, he said.
The IAF depended on Hindustan Aeronautics Ltd. for its fighters, trainer aircraft and helicopter fleet. The company had slipped on delivering the required number of Sukhoi-30 fighters, Hawk advanced trainers and in completing the Intermediate Jet Trainer. The IAF which is the main customer for the Light Combat