April 16, 2015
Following India’s delayed decision on the Medium Multi Role Combat Aircraft (MMRCA), a process initiated in 2000, the announcement by Prime Minister Narendra Modi on the first day of his trip to France on Apr 13, for an ‘in principle’ clearance for the outright purchase of 36 Rafales in flyaway condition, is being seen as a game changer in the way defense procurement will now be done in India. The buy includes life cycle support and 50% offsets, AerospaceDiary learns
While India is expected to exercise its option clause for 18 Rafales in future for outright buys that will take its Rafale squadrons to three, in a recent interview by IBN7 with Defense Minister Manohar Parrikar clearly indicated a desire to produce a single-engine fighter on Make in India basis. According to Parrikar the original deal for 126 is valued at approximately $14.50 billion, which leaves a large amount of money to consider the single-engine fighter. We are guessing it will be thrown open to the Indian industry tying up with OEMs. There seems to be a major flaw in this thinking. For instance, if there is one OEM and five Indian companies gunning for the same product, how does that really make it a fair bid? Ultimately the OEM will give the best price to the partner of his choice! Let’s bring in more transparency since the process seems to have started.
It is pretty clear too that no Indian private company will invest in equipment for which there are no committed volumes. Recently at a seminar, I asked an OEM who on stage committed manufacture for his fighter. But on a one-to-one he confessed that would only happen if there was a firm order. Fair enough. Finally, some sane thinking has emerged with Parrikar confirming there would either be guarantees on numbers or subsidy offered to the company by the MoD. Hopefully, HAL will steer clear of this project.
Parrikar was clear that the MMRCA project initiated in 2000 should never have been released under an RFP. “It should have been a Government-t0-Government (G-G) deal... as all the aircraft considered were different….” He added the Defense Procurement Policy that would be announced soon would be less complicated and put ‘Global Buy’ under a G-G clause. What about countries that do not have G-G processes one thinks.....
“The IAF is in desperate need for this 4thGen plus fighter. Our Fifth Gen (in development with Russia) could take 10-15 years.” On the remaining 90 Rafales, “discussions will be held with the IAF on how many (more to) buy and how many are required.” We are hearing 30 more Su-30s may be ordered. Perhaps something needs to be done on the large number of AOGs!
Now, we need to see if the govt puts its money where its mouth is by signing the order speedily. Or we’ll all go back to our favorite pastime- grumbling and moaning.