Tuesday, January 26, 2016

French and Indian Leaders Advance Fighter, Helicopter Pacts

  Jan 26, 2016
Prime Minister Narendra Modi reaffirmed India’s intention to acquire Rafale fighters from Dassault and military helicopters from Airbus, in talks with President François Hollande.

France’s nine-year wait for a contract from India for the Rafale is not quite over, but an inter-government agreement covering acquisition of 36 fighters was signed during President François Hollande’s visit to New Delhi on January 26. Invited by Indian Prime Minister Narendra Modi to be the chief guest at India's Republic Day military parade in New Delhi, Hollande also joined the Indian leader in witnessing the confirmation of a previously announced partnership between Mahindra Defence and Airbus Helicopters.
The Rafale signing “has effectively transformed the nature of the transaction from a commercial bid to a government to government sale,” Rahul Gangal, partner with consultancy group Roland and Berger, told AIN. While Dassault Aviation said “it is very pleased with this progress, and is actively supporting French authorities in their efforts to finalize a complete agreement within the next four weeks,” there are doubts in India about this timeline. Some offset, support and cost issues remain unresolved.
However, an Indian defense ministry official told AIN that “the deal is virtually done and both countries have committed to the buy.” He further noted that the two other French industrial partners in Team Rafale, Safran and Thales, are in a better position to honor the offset requirements, given their decades-long involvement with Indian industry. France and India signed a total of 16 agreements during Hollande’s visit, and those relating to energy generation (including nuclear) and urban security could be relevant to France’s offset obligations.
Commenting on the pact with Mahindra, Guillaume Faury, Airbus Helicopters president and CEO, said: “Through this partnership, we target building several of our…helicopter models in India.” The two companies have proposed “to set-up a final assembly line in India, develop Tier 1 and Tier 2 suppliers and extensive transfer of technology, with the intent to ultimately achieve 50 percent indigenous content.” However, a military official said this would take place only once there is an Indian procurement contract in hand. “Nobody will set up a greenfield project [here] for the overseas market,” he noted.
The helicopters we are proposing are of proven designs. We are laying the groundwork with the objective to ramp up quickly,” said Devendra Bhatnagar, CEO of Mahindra Defence Naval Systems. A request for proposal for 123 multirole helicopters (NMRH) for the Indian Navy is expected. The service previously selected Sikorsky to supply 16 S-70B SeaHawks to part-meet the NMRH requirement, but no contract has been signed yet .

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