PARIS and NEW DELHI — India's surprise request to buy 36 Rafale fighter jets in an off-the-shelf order reflects a pragmatic pursuit that shortcuts a lengthy local build program to more swiftly meet Air Force requirements, analysts said.
"I asked the president [French president Francois Hollande] to supply us with 36 Rafale jet fighter planes, the ready-to-fly models," Indian Prime Minister Narendra Modi said April 10 at told April 10 a joint press conference at the Elysée presidential office, Agence France-Presse reported.
The new deal for 36 will be under a government-to-government contract, the French daily Le Monde reported. Modi announced the plan on the first day of a two-day state visit to France.
That figure of 36 effectively doubles an initial batch of 18 Rafales built in France that prime contractor Dassault Aviation had been due to deliver within in India's prospective total order of 126 fighters for $12 billion. for 126 fighters. The French company has been locked in three years of contract negotiations as New Delhi sought to boost the domestic industrial base with local assembly of 108 units.
The Details on price and the total number of Rafales to be bought under the new proposal remain unclear. Indian Ministry of Defence officials were unavailable for comment.
A Reuters report indicated the purchase could be worth about €4 billion (US $4.3 billion).
What this proposal could mean to the talks to buy 126 aircraft is uncertain. Bhim Singh, a retired Indian Air Force wing commander, said the announcement to buy 36 aircraft off-the-shelf aircraft 36 instead of 18 aircraft wcould mean scrapping the original request for proposal and renegotiating the entire project.
The new deal for 36 will be under a government-to-government contract, the French daily Le Monde reported. Modi announced the plan on the first day of a two-day state visit to France.
"France has always been a reliable supplier for India from jet fighters to submarines," Modi said. "We want the terms and conditions to be negotiated on this issue and our civil servants are going to debate these aspects in depth and press ahead with the negotiations."
Hollande said he was "deeply moved" and the partnership between the two countries would shift "into a new gear."
The agreement casts a fresh light on India's approach to arms deals as this purchase will arms exports as the Indian announcement seeks to speed up delivery and reflects a geopolitical concerns, analysts said.
"This is a good plan as an off-the-shelf purchase bypasses the planned Indian local production and technology transfer, which are taking too long to negotiate," said Hélène Masson, senior research fellow at think tank Fondation de Récherche Stratégique. "Indian industry is not yet ready to start the assembly."
State-owned Hindustan Aeronautics Ltd. (HAL) would be the local partner and co-contractor to build the Rafales in India after Dassault had completed delivery of the initial batch built in France.
This is good news for Dassault's production facilities although the company faces the challenge of increasing the output, Masson said.
Dassault can increase Rafale production to a little more than 2.5 units per month compared with the present annual output of 11, Chairman Eric Trappier said March 11. The company delivers one fighter a month and closes the Merignac assembly plant, southwest France, for a traditional August month's holiday.
France needs export deals for the Rafale as the government plans to cut the annual domestic orders in 2016, so foreign customers are needed to keep the production line open. The family-controlled company signed in February signed a contract to deliver 24 fighters to Egypt as part of a €5.2 billion (US $5.6 billion) deal also comprising also a DCNS FREMM multimission frigate and missiles reported to be from MBDA and Sagem.
Dassault said in a statement it "welcomes [India's] intention to finalize the acquisition of 36 Rafale aircraft at conditions that will allow [it] to meet rapidly the security needs of India."
Dassault is prime contractor, with major partners engine maker Snecma and electronics and radar specialist Thales.
France needs export deals for the Rafale as the government plans to cut the annual domestic orders in 2016, so foreign customers are needed to keep the production line open.
The Indian administration has pushed the "Make in India" policy in a bid to boost domestic industry. But that may be costly and slow, while the regional threat is seen to be rising, an analyst said.
The Indian Air Force is keen to replace its aging fleet of fighters as China is seen as increasingly belligerent, said Robbin Laird of consultancy ICSA, based in Washington and Paris. "There is a challenge in the neighborhood" is an Indian officer's diplomatic way of referring to Beijing.
New Delhi can maintain its independence from China and Russia and maintain its status as a regional power while strengthening links with Paris through the Rafale deal, Laird said. India, which has fought border wars with Pakistan, also sees Islamabad as a local threat.
"The Rafale is a very good aircraft," he Laird added. said. "Dassault has a mature production line and the plane is combat proven. There is no doubt about that."
With a government-to-government deal, France buys the aircraft from Dassault and sells them to India, with Paris guaranteeing the price, he said. That is faster, simpler and more cost effective as local industry is not ready to build the Rafale in India.
Efficient local production takes decades to master and that fails to satisfy the pressing needs of the Air Force, Laird he said. "This is a bargain price, this opens the door." he said.
Indian companies will likely handle maintenance of the initial batch, which would help prepare local industry to assemble the planes, he said.
An Indian Air Force (IAF) official said the service would have preferred licensed production of 108 fighters in India. so that they would not depend on spares and upgrade of the aircraft on France.
The details on price and the total number of Rafales to be bought remain unclear. Indian Ministry of Defense officials were unavailable for comment.
Email: ptran@defensenews.com; vraghuvanshi@defensenews.com
Vivek Raghuvanshi is the India correspondent for Defense News.
