100-jet order needed to build Rafales in India: Dassault
French aircraft maker Dassault Aviation on Wednesday said it would be in a position to set up a production line for Rafale jets in the country only if India placed an order for at least 100 fighters. Interacting with reporters on the opening day of Aero India 2019, Dassault Aviation CEO Eric Trappier said the current order for 36 planes was not enough for the plane maker to set up a production line or manufacture Rafale parts in India.
“An order for 100 jets is required for setting up a production line. That’s the business plan,” he said Dassault Reliance Aerospace Ltd (DRAL) has built cockpit sections and fuel tanks of Falcon 2000 business jets at Nagpur but the company has no plans to manufacture Rafale parts if India caps the order at 36. DRAL, Dassault’s joint venture (JV) with Anil Ambani’s Reliance Group, plans to assemble Falcon 2000 business jets at its Nagpur facility by early 2022 for international customers.
“DRAL has started with Falcons. To give work to a company, we need to have a business plan; 36 Rafales are not good enough for transfer of technology,” he said. The first locally built cockpit section of the Falcon 2000 business jet was displayed at the air show.
Air Vice-Marshal Manmohan Bahadur (retd), additional director general, Centre for Air Power Studies, said it did not make economic sense for original equipment manufacturers (OEMs) to set up full facility for manufacturing if the order is small. “The OEMs will not get returns on investment. Hence, there has to be a break-even order,” Bahadur added.
DRAL is assembling components for the Falcons and will eventually roll out the jets from a 150,000 square-foot production line as part of an offset commitment under the Rafale deal that requires Dassault to source components worth 50% of the contract value locally.
Asked why Dassault chose the Reliance Group that has no experience, Trappier said, “I have the experience and I am transferring the technical knowhow.” Asked if the controversy swirling around the ₹59,000-crore jet deal could dent the company’s chances of winning more orders, Trappier said the Rafale is not a scandal and Dassault could deliver more planes if the Indian government wanted. He said the company was also pursuing an Indian project to build 114 fighter jets locally.
“You always have to look to the future. We have been here for the last 60 years and plan to be in India for the next 60 years,” he said. On the Comptroller and Auditor General report that held that the deal for 36 Rafale jets was 2.86% cheaper than a previous one for 126 jets, Trappier said that according to his evaluation, the new deal was 9% cheaper. That was the same claim made by the Indian government.
“We gave our pricing to the French government, which passed it on to the Indian government,” he said. He said the first Indian Rafale would be delivered in September 2019 and the remaining 35 over the next three years at the rate of one plane per month. The National Democratic Alliance government’s decision to enter into a government-to-government deal with France to buy 36 Rafale warplanes was announced in April 2015 with the deal signed a little over a year later.
In the run-up to the 2019 elections, the Congress has repeatedly attacked the government over the issue, accusing it of awarding the deal for 36 Rafale fighters to Dassault (at a higher price, it claimed) so as to benefit Anil Ambani’s Reliance Group. The government, Anil Ambani’s company and Dassault have rubbished the allegations.
Congress spokesperson Priyanka Chaturvedi said: “This vindicates the Congress claim that the manufacturing of Rafale was deliberately taken away from HAL to benefit some private businessman in the form of offset contracts. Now even if manufacturing is brought into India, the same businessman would stand to gain at the expense of HAL...”