The defence minister indicated on Monday a $25-billion Indian tender for buying 126 advanced combat aircraft had virtually been scrapped, with New Delhi stressing any future deal for Rafale fighter jets would be through direct negotiations with the French government.
The move comes two days after Prime Minister Narendra Modi announced India would buy 36 Rafale planes from France in fly-away condition through the government-to-government (G2G) route, reflecting a sense of urgency to buttress the Indian Air Force (IAF)’s depleting fleet.
India picked Rafale jets over Eurofighter Typhoons in January 2012 after French firm Dassault Aviation emerged as the lowest bidder for the medium multi-role combat aircraft (MMRCA) tender for 126 planes.
But New Delhi may no longer go in for 126 planes and could reassess its requirements in the new scenario. As of now, the government appears to be keeping its options open to buy more fighters – it could turn to France or another foreign vendor.
Defence minister Manohar Parrikar said the MMRCA negotiations with Dassault had entered into a "loop" with no solution in sight.
He said direct negotiations with Paris would now decide how many more Rafale fighters India would buy and if this would be in line with Narendra Modi’s flagship Make in India programme.
India took the G2G route as three years of price negotiations for local assembly of the aircraft produced no results.
"But if this (G2G) route is followed, obviously, one car cannot travel on two different roads. There were a lot of problems on that (tender) road. That is why we have adopted the G2G procedure," Parrikar told reporters in Delhi.
A G2G programme is a contract between two governments and does away with the requirement of floating a global tender to buy weapons and systems. Such transactions may be complicated in their conception and execution, but are more transparent to financial scrutiny.
"Instead of going through the tendering route where there was a lot of confusion and chaos, it was decided that we will go through the G2G route," the minister said, adding the future course would be decided after talks between the two governments.
Parrikar, however, did not specify if the IAF’s requirements for more planes would be met through Rafale or if other players could also enter the fray. Asked what it meant for the tendering process, he said it had not been decided yet.
The original plan was to buy 18 Rafales in fly-away condition, while the remaining were to be built in India by HAL. But the two sides could not iron out issues concerning cost and local production.
However, some experts have panned the deal for 36 Rafale fighters. Strategic affairs expert Bharat Karnad called the pact a "regression" that torpedoed the government’s Make in India thrust.
"The IAF brass may be happy. But consider the deleterious effects of yet another type of weapons platform added to the fleet. At last count IAF had 27 different types of aircraft in its inventory," he posted on his blog last week.
Karnad said the final bill for each of the Rafales would be close to $200 million, an unexpected windfall for France.
He said the French combat aircraft industry, which was down to manufacturing just 11 of these planes annually, will now be able to ramp up production and "keep itself in the clover for another 8-10 years thanks to the infernally stupid decision by the government."