Rafale Encounters Political Headwinds in India

by Neelam Mathews

 - July 31, 2018, 11:52 AM

As India’s general elections draw closer this year, the deal signed in 2016 for 36 Dassault Rafales is getting attention in parliament as opposition political parties brawl over the contract they label as a “scam and graft,” while promising to make it an election issue against the present Narendra Modi government.

Charges leveled against the government-to-government deal include lack of transparency on details and a cost that is claimed to be much higher than that negotiated in early 2012. That year, the Rafale emerged as the winner for the Indian Air Force’s 126 medium multi-role combat aircraft program. Negotiations by congress were not taken further due to unresolved issues on the transfer of technology and offsets between Dassault and Hindustan Aeronautics Ltd.

The flyaway costs of the aircraft being supplied by Dassault Aviation now are less than those negotiated six years ago but, “the Meteor and Scalp missiles and India’s nuclear specifications are what have made the price slightly higher,” a retired chief of air force told AIN, adding that, “This is much ado about politics.”

Indian Air Force chief Birender Singh Dhanoa, who has constantly defended the deal as “being neither overpriced nor controversial,” told AIN that the delivery of the Rafales would start at the end of 2019. AIN has learned that training of Indian pilots has been going on in France for the past year and a half.

India has also negotiated a 50 percent offset deal and for the Rafales to be delivered in five years. The offset phase starts once the contract has been signed with offsets to be honored on an annual basis to be completed within seven years.

The opposition has charged that the private company Reliance Infrastructure, known to the prime minister, was chosen by the Indian government to be the offsets partner for Dassault. “It is the OEM—not the government—that chooses the Indian offset partner that can be a public or private company according to the Defense Procurement Policy 2016,” said a defense official.

Speaking about the joint venture signed by Reliance and Dassault a few years ago, Eric Trappier, chairman and CEO of Dassault Aviation, told AIN in April: “Reliance is our partner and we believe in them,” but he did not indicate if Reliance was an exclusive partner. Major subcontractors to the French manufacturer who have already tied up with Indian companies include engine-maker Safran and Dassault Systèmes, the latter providing 3D modeling and product life-cycle management software. Thales said it would develop Indian capabilities to integrate and maintain the radar and electronic warfare sensors at the Nagpur facility, along with an Indian supply chain for manufacturing microwave technologies and high-performance airborne electronics.