India is considering direct purchase of two squadrons of the French Rafale fighter plane to avoid the mire of price negotiations that the deal for 126 of these aircraft has been stuck in since January 2012.
The Dassault-manufactured Rafale fighter was on January 31, 2012 announced as the preferred bidder in the $13-billion contract for 126 medium multi-role combat aircraft (MMRCA). India is now seriously considering strategic purchase of up to 40 Rafales for the Indian Air Force (IAF) through the government-to-government (G2G) route on account of operational necessity. The tentative price tag of this deal would be over $4 billion.
New Delhi and Paris remain silent on the new proposal.
But, a senior official involved in the deal says the decision to bypass the 2004 MMRCA tender route - on the basis of which Rafale emerged in the lead - was taken as both Dassault and Hindustan Aeronautics Limited (HAL) were unable to bridge price differences arising out of original request for proposals (RFP).
"After detailed analysis of the RFP and the laborious process followed by the previous government, it was evident that the entire deal could not be worked out with serious discrepancies in the negotiations that could lead to litigation in future," said a senior official.
The 2012 deal envisages 18 ready-to-fly Rafales supplied to the IAF by this year, and the remaining 108 to be manufactured under licence in India.
With the NDA government not willing to let the IAF fighter squadron strength dip into the critical zone in coming years, Prime Minister Narendra Modi and French President François Hollande will on Friday discuss ways to clinch the Rafale deal. "If the French company is willing to lower the price per aircraft due to recovery of development costs on missiles, ammunition and sale to other countries, then India could go for outright purchase of the 4.5 generation fighter through the French government route. The deal could be negotiated and signed in 2015 itself but numbers to be purchased depend on offered price. India has purchased the Lockheed Martin C-130 J Super Hercules, Boeing C-17 Globemaster and P-8I Poseidon aircraft from the US on the basis of strategic requirement and operational necessity through the G2G route," a senior official told Hindustan Times.
The IAF's sanctioned strength is 42 squadrons but it is
currently operating only 34 with the Russian-origin Sukhoi 30 MKI being the teeth and the Soviet-era MiG-21 forming the long tail. Given the serviceability, repair and upgrade of these fighters and that eight MiG-21 squadrons are to be phased out in the next eight years, the IAF is set to be heavily depleted. It is in this context that the Modi government plans to have two or three Rafale squadrons to spearhead the IAF with the indigenously made Light Combat Aircraft (LCA) replacing the MiG-21 in coming years.
The French government is expected to join the 'Make in India' initiative with an offer of two or three top defence technologies, and New Delhi is not adverse to Dassault floating a joint venture with a private company to build more Rafales in India. Similar offers of building fighters in India will also be made to other MMRCA competitors like the Saab Grippen, Boeing F-18, EADS Eurofighter, Russian MiG-35 and Lockheed Martin F-16 so that the IAF dominates the evolving security scenario in Asia.