Intro: Sensing the urgency to revive the Indian Air force, Prime Minister Narendra Modi's decision to buy 36 Rafale fighter aircraft from France was based on national security and cutting through bureaucratic red tape. By considering the two, he has manged to procure the fighters at a lower price than estimated earlier.
Prime Minister Narendra Modi’s trip to Europe had certainly aroused lot of expectations especially in view of his agenda to push forward his ambitious ‘Make in India’ dream. It significantly outlined the broader message that Indian government feels that ‘Linking West with India’ is as significant as ‘Linking East with India’ was important.
Hannover Messe 2015 (The world’s leading trade fair for industrial technology in Germany) was a perfect opportunity to showcase India’s potential for Modi: India is a partner country at the Hannover Messe 2015 fair, which was inaugurated by Prime Minister Narendra Modi and German Chancellor Angela Merkel.
Post the event, the reactions pouring from industrial barons in India and media is suggestive that Modi was successfully in impressing upon the German industry, German government and German politicians that they should now look at India in a different way. Modi emphasised that ‘Make in India’ is not a mere slogan but a national movement. This he did in Germany as well as in France, in the first leg of his three nation tour.
Modi’s ‘Make in India’ campaign received an overwhelming response from Airbus Group which aims to increase its sourcing of aeroparts from Indian companies to $ 2 billion in next five years. But more than his trip to Germany, it was PM’s trip to France, which attracted even more attention due to two reasons: one, the decision on fate of Rafale deal and other, the Areva nuclear equipment deal. Both issues were complicated and yet urgent; especially the Rafale agreement which was stalled for long and demanded not a conventional but an out of box solution.
Areva signed a Pre-engineering Agreement (PEA) contract with Indian operator Nuclear Power Corporation of India Limited (NPCIL) to prepare the license for Areva’s European Pressurized Reactor (EPR) for the Jaitapur project. The studies will help both companies to finalise the technical configuration of the project.
Areva and India’s engineering and construction company Larsen & Toubro also signed a memorandum of understanding (MOU) to explore avenues of collaboration for the project.
Indian Air Force (IAF) has long been voicing concerns over the delayed process of procuring new fighter planes. Hence in the backdrop of IAF urging the government to quickly close the deal; it was highly essential that the stalled negotiation between Dassault and Indian government was taken to the negotiating table with French government.
Thus a government to government agreement was the breakthrough that was offered by Modi and French President Francois Hollande. This agreement will not only avoid further delay in procurement of fighter planes but it will also do away with going back to Request for Proposal stage, and any charges of corruption or political opposition. Moreover, instead of the initial proposal of procuring 18 jets directly from France, the fresh deal will induct 36 Rafale fighters into IAF within next two and a half years. The 36 “ready to fly” Rafale fighters will modernise the aging Indian fighter planes fleet and meet the critical operational necessity.
The present deal is principally agreed to and the finer details will be worked out; yet, the estimate of the deal is approximately $ 4.25 billion. It needs to be underlined that this being a government to government agreement, it will be a transparent one and without any flaws.
In 2012, Rafale defeated Eurofighter Typhoon after commercial bid was opened. But the final negotiations were stalled over Dassault’s refusal to take full responsibility for 108 fighters to be made in India by HAL, either for their quality or performance. This also required transfer of technology. Protracted negotiations did not yield any solution and had reached a stage of almost standstill. But now with Modi himself taking the initiative, IAF will heave a sigh of relief. And Dassault is also likely to get oxygen since it has failed to find international customers for Rafale except for Egypt which has ordered 24 Rafale fighters in February. But that should not lead to any conclusion or apprehension in itself that the Rafale fighters are weaker than its rivals. Such claims and threats to take the matters to the court will give a big blow to the modernisation efforts and taking bold decisions.
It should be understood that the Rafale fighters have been chosen as the Medium Multi-Role Combat Aircraft (MMRCA) for the IAF after a stringent technical evaluation. The IAF should be allowed to have the final word on the technical aspects and it will be prudent to take up any issues pertaining to the apprehensions about the technical or performance weakness of Rafale fighters with the Defence Minister who in turn should clarify all the misgivings and the doubts.
One more point that also needs to be addressed in no unclear terms is whether the decision to procure 36 Rafale planes in ‘ready to fly’ condition from France is contrary to Prime Minister’s ‘Make in India’ agenda. The finer details of the deal have yet to be worked out. But at present it is not clear whether the earlier plan to manufacture 108 Rafale fighters in HAL, Bengaluru remains unaltered or gets a fresh impetus. The present signs suggest that this is unlikely. If Transfer of Technology is possible, then at what cost is another worrying aspect. It is also suggested that if PSUs like HAL are disfavoured by Dassault and alike, then the Transfer of technology should be to a private player. But this too does not seem feasible since no Corporation will have all the necessary infrastructure and facilities.
We need to remember, the objective of ‘Make in India’ plan is to attract foreign direct investment and thereby create job opportunities in India. But it must also be highlighted that this cannot be a basic objective of any defence deal. Defence deals are primarily for arming the defence forces with modern, latest and suitable arms, ammunition and equipment to fight the foes. By going for direct procurement of 36 Rafale fighters, PM Narendra Modi has achieved the objective of strengthening the IAF, and by government to government agreement has enhanced the possibility of the procurement of fighters at a lower price than estimated earlier.
Rahul Gokhale (The writer is a senior columnist and writes on defence and foreign policy issues)