India Finally Confirms Rafale Deal

Neelam Mathews and Chris Pocock
Sept 23 2016

French Defence Minister Yves Le Drian (left) signed the inter-governmental agreement on the Rafale with Indian Defence Minister Manohar Parrikar.

More than four years after the Dassault Rafale was chosen for its Medium Multi-Role Combat Aircraft (MMRCA) requirement, India has signed an inter-governmental agreement with France worth €7.87 billion for 36 aircraft. The deal was inked in Delhi today by the defense ministers of both countries. It specifies details of the contract, including timelines. However, the support, logistics and 50 percent offsets package will be signed in a few months, a senior MoD official told AIN.

While the agreement has an option clause for 18 more Rafales, it is unclear whether more of the French jets will eventually be manufactured or assembled in the country, under the terms of the “Make In India” policy. The original MMRCA requirement envisioned a total of 126 aircraft, of which only the first 18 would be produced in France. But negotiations stalled on the terms and conditions for licensed production.

In the past year, rival Western combat aircraft manufacturers have expressed their willingness to consider Indian production of the F-16, F/A-18, Gripen or Typhoon. “A long-term solution to the depleting force structure, preferably from indigenous sources, needs to be taken on the highest priority,” said Ankur Gupta, vice president A&D at Ernst & Young India.

Commenting on the agreement, Dassault chairman and CEO Eric Trappier said that his company “will endeavor to ensure ambitious industrial cooperation” under the “Make in India” policy. But an analyst not willing to be identified told AIN: “Shifting production to India will not create jobs for the French, which is a sensitive issue there. Besides, the cost of the Rafale is exorbitant.” The analyst noted that F-16s are in Pakistan’s inventory and the F/A-18 “had massive test failures during trials of the MMRCA. It will be difficult to convince the Indian Air Force to accept them.”

Alternatively, India could likely order more Sukhoi Su-30s to fill its immediate requirement for at least 90 fighters. Simultaneously, India has also speeded negotiations with Russia on the delayed project for the joint development of the fifth-generation fighter aircraft (FGFA). Each country plans to invest $4 billion in theFGFA.