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Rafale Multi-Role Fighter

India's cabinet committee on security on 21 September 2016 approved the purchase of 36 fighter jets from France's Dassault. "The deal was approved at the meeting in the evening. It will now be formally signed by Indian and French defence ministers on September 23 in New Delhi," an unnamed Indian defence ministry official told AFP. The official said that other details including the exact amount and formalities "will become clear after the signing event".

India's Minister of Defence Nirmala Sitharaman, while taking part in a debate on the deal in the country's parliament, said 04 January 2019 that "the off-the-shelf purchase of the fighter jet was the need of the hour" as political adversaries have been adding strength in air power very fast while the depleting strength of fighter jet squadrons was posing challenges to the Indian Air Force (IAF). "The first aircraft will be delivered in September 2019 and 36 aircraft will be delivered in the year 2022. The process of negotiation was finished in 14 months," Sitharaman added.

India and France signed a Defense Cooperation Agreement during Chirac's 19-21 February 2006 visit to India that would pave the way for more joint exercises and training operations between the two countries in addition to promoting defense industry cooperation. A sale of Rafale aircraft was discussed, but there two major areas of concern regarding the potential sale of the French aircraft to India were technology transfer and cost. The Rafale aircraft was much more sophisticated than its predecessor, the Mirage, and "sensitive" discussions took place over technology transfer issues. The second area of concern was price; the Rafale would cost significantly more than the Mirage, and the French had to justify the higher price tag. Until recently the Mirage was being considered for purchase until the manufacturer, Dassault Aviation, informed the Indian Government of its decision to stop making the jet.

The Indian Air Force (IAF)was slated to receive capital outlay funds for buying major equipment, including the Medium Multi-Role Combat Aircraft (MMRCA). The IAF urgently needs new aircraft to replace its ageing Soviet-MiG series of fighters. The US Boeing F/A-18 Super Hornet, the Lockheed Martin F-16, the Russian MiG-35, the Swedish Gripen, the French Rafale, and the Eurofighter Typhoon manufactured by a consortium of German, British, Spanish and Italian companies are the six aircrafts vying for the MMRCA order.

During Prime Minister Singh’s visit to France for the Bastille Day parade in July 2009, both leaders pledged to increase defense cooperation, and Singh characterized the relationship as “a close and wide ranging strategic partnership”.

It was reported on 31 January 2012, that India had selected the Dassault Rafale fighter jet as the winner of its MMRCA competition. The Dassault entrant had been selected over the Eurofighter Typhoon. It was reported that Dassault had been the lower of the 2 bidders, with the deal being estimated to be worth $11 billion. Under the deal, 18 Rafales were to be delivered ready-made, while 108 more would be built in India. Further negotiations were expected to take place before India finalized the agreement.

On 10 April 2015, Indian Prime Minister Nradendra Modi announced, while on a state visit to France, that India would purchase 36 Rafale fighter jet aircraft. All 36 aircraft would be built in France; an increase from the original agreement's 18. Overall, the announcement still marked a decrease from the initial 126 Rafale that were to be sold. Though this development initially left unresolved the fate of the initial deal's remaining 90 aircraft, India announced in late May 2015, that due to their high cost, it would not pursue the purchase of additional Rafale aircraft. Indian Defense Minister Manohar Parrikar was quoted as saying that the government's original plan to purchase 126 aircraft from the French arms maker Dassault was 'economically unviable and not required.'

It was reported on 31 January 2012, that India had selected the Dassault Rafale fighter jet as the winner of its MMRCA competition. The Dassault entrant had been selected over the Eurofighter Typhoon. It was reported that Dassault had been the lower of the 2 bidders, with the deal being estimated to be worth $11 billion. Under the deal, 18 Rafales were to be delivered ready-made, while 108 more would be built in India. Further negotiations were expected to take place before India finalized the agreement.

Once Dassault Rafale and Eurofighter Typhoon were shortlisted, the Ministry of Defence then took over the price negotiations, with Eurofighter submitting what sources said was a bid weighing kilos, while the French company put in a slim proposal. As is the procedure, both bids came with sealed envelopes carrying the price, and Dassault finally got the contract from the Ministry of Defence, as the lowest bidder.

India did not actually award this contract. Rather, they determined who was assessed as making the lowest bid and therefore asked to enter into further negotiations. But both BAE Systems and government body UK Trade and Investment [UKTI] have publicly stated that the Eurofighter Typhoon has not yet been ruled out for India. On 07 February 2012 it was reported that Eurofighter partners in the UK, Spain, Italy and Germany were to consider 'all options', including a potential price cut, in order to win India's multi-role fighter contract (MRCA). Price cuts were being considered, and BAE argued that Typhoon would be newer, more versatile and easier to modernise than the French aircraft.

By one account, the negotiations by the MoD eventually disclosed that the French company had projected a totally false figure, leaving what it called 50 "miscellaneous" items out of the quoted price. The cost of these when added on escalated the bid dramatically from the initial $9 billion to what was later bandied about (inclusive of inflationary costs) at $22 billion. The negotiations thus hit a rocky patch, and continued for three years since 2012 without a breakthrough

By early 2012 State-run Hindustan Aeronautics Limited (HAL) was preparing to progressively manufacture the Dassault Rafale combat jet that has apparently been chosen by the Indian Air Force (IAF) for its $10.4 billion order for 126 planes. The first 18 aircraft would come in fly-away condition, within three years of signing of the contract and meanwhile, HAL would get the production tooling, expertise and technical know-how under transfer of technology from the French. The remaining 108 aircraft would initially be progressively manufactured from SKD (semi-knocked-down) and CKD (completely knocked-down) kits. Gradually, HAL would start producing the fuselage and other parts from the raw materials. Dassault engineers would assist in technology transfer and production plants.

India insisted that Dassault take full responsibility for the aircraft produced at Hindustan Aeronautics Ltd. plant in Bengaluru. Negotiations had been deadlocked for over a year on this point. France said it cannot give guarantees for production of the aircraft made at a facility over which it has no administrative or expert control. The Indian government would decide on the Rafale deal only after the ministry's contract negotiations committee submitted its report in early March 2015.

Under a new proposal in March 2015, Dassault would not be liable for penalties if Hindustan Aeronautics failed to deliver the planes on time. The deal was initially worth $12 billion but was widely estimated to have jumped to $20 billion, primarily because of the implications of building some of the jets in India. Under terms of the contract, 18 of the planes will be sold ready-to-fly while the rest will be assembled at an Indian state-run facility.

By March 2015, the talks with Indian aerospace company Hindustan Aeronautics Limited (HAL) had almost reached a conclusion, according to Dassault. But in April of that year, after Modi paid an official visit to France, the talks suddenly broke down to general surprise. Reliance Group, which has no experience in aeronautics, replaced HAL and finalised a new contract for 36 jets. In January 2016, at the time of the negotiations, Reliance had financed a film co-produced by Julie Gayet, the partner of Francois Hollande, who was president at the time. This could constitute “influence peddling”. France’s Le Monde newspaper also revealed that France in 2015 cancelled a 143.7-million-euro tax adjustment targeting a French firm belonging to Reliance, at the time when the deal was being negotiated.

On 10 April 2015 France's Le Monde newspaper reported that India was aiming to buy 63 Rafale jets for $7.7 billion. Indian Prime Minister Narendra Modi said on 10 April 2015 during a visit to Paris that India will buy 36 French-made Rafale fighter jets to boost the country’s defense capabilities. "I have asked President [Francois Hollande] to supply 36 ready-to-fly Rafale jets to India," Modi told a media conference. "Our civil servants will discuss (terms and conditions) in more detail and continue the negotiations," he added. However, according to a Reuters’ source in the French Defense Ministry this agreement comes separate from a larger 126-plane deal estimated at about $20 billion which the two countries have been negotiating for three years.

The deal, another boost for French manufacturer Dassault Aviation after it sealed its long-awaited first export deal to Egypt in February, could be worth about 4 billion euros. President Hollande said Defence Minister Jean-Yves Le Drian would travel to India soon to finalise the deal.

India and France had already been in exclusive negotiations for three years. The value of a larger 126-plane deal being negotiated is estimated to have grown to about $20 billion from an initial $12 billion, primarily because of an Indian requirement that 108 of the jets be built in the country.

A French defence ministry source said the deal was separate from the original negotiations and came about after new Indian Defence Minister Manohar Parrikar indicated the country’s urgent requirements. “We informed them we were ready to respond to their operational needs separate from the tender under discussion for three years,” the source said. India’s military has said it needs to start replacing its ageing jet fleet from 2017.

Details of the deal struck between PM Modi and French President Francois Hollande in this government to government deal remained shadowy to say the least. Little concrete information had come from the government, in on or off the record briefings, to clarify the contours of the agreement except for the fact that the Request for Proposal that gave the contract for the 126 fighter jets had probably been scrapped. But there is no answer as to what, if anything else, had been or was being negotiated.

An advance aircraft such as Rafale can be produced in India after Transfer of Technology (ToT) by the Original Aircraft Manufacturer. As per the India-France Joint Statement issued by the two countries during the Prime Minister’s visit to France, Government of India conveyed to the Government of France that in view of the critical operational necessity for Multirole Combat Aircraft for Indian Air Force (IAF), Government of India would like to acquire 36 Rafale jets in fly-away condition as quickly as possible. The two leaders agreed to conclude an Inter-Governmental Agreement for supply of the aircraft on terms that would be better than conveyed by Dassault Aviation as part of a separate process underway, the delivery would be in time-frame that would be compatible with the operational requirement of IAF; and that the aircraft and associated systems and weapons would be delivered on the same configuration as had been tested and approved by IAF, and with a longer maintenance responsibility by France. This information was given by Defence Minister Shri Manohar Parrikar in a written reply to Shri Ravi Prakash Verma in Rajya Sabh on 05 May 2015.

The French side agreed to reinvest in the Indian economy 50 percent worth of the contract on the delivery of French-built Rafale fighters for Indian Air Force, the Indian Ministry of Defense said 18 December 2015. "Keeping the dwindling effective squadrons strength in view, the Indian Air Force has undertaken a massive upgrade programme of its fighter and transport Aircraft. To give thrust to this programme it has immediately gone for procurement of 36 Rafale Aircraft on government to government sell which includes 50% offsets that will help our medium and small scale industries in the aviation sector," the statement read.

Bharat Karnad, former member, India's National Security Council, confirmed in May 2016 the corruption in the scrapped AgustWestland helicopter deal and the obstinate position of both sides over the cost of the deal are threatening to send the protracted negotiations into cold storage forever. "The AgustaWestland corruption scandal has pretty much sunk the Rafale deal for fear that France's cultivation of interested parties over the past decade could end up tarring the ruling BJP regime in some way, considering a lot of the Indian Air Force brass and Ministry of Defense officials spanning the NDA and UPA governments may be implicated in any future investigation and who, in turn, may drag the relatively clean reputation of Narendra Modi & Co. through the mud."

India's Defense Minister Parrikar statement in Parliament said: "We are trying our best to save money. If we purchase the required 36 Rafale, we will buy them at a price that's below the cost that was estimated when we were negotiating for 126 Rafale."

Based on the original cost for 126 Rafale agreed in the earlier negotiations, 36 Rafale would cost no more than 5 billion Euro. However, France quoted 7.5 billion euro for the 36 Rafale in April — a proposition India was reluctant to accept. Meanwhile, sources close to the French negotiating team suggest that the price offered by India was not acceptable to the Dassault Aviation, which already had a full order-book. As per a 2015 deal, the manufacturer agreed to sell 24 Rafale to Egypt at a cost of 5.2 billion euro. It was also selling 24 Rafale to Qatar and expected Malaysia to place an order soon.

As per the India-France Joint Statement issued by the two countries during the Prime Minister’s visit to France, Government of India conveyed to the Government of France that in view of the critical operational necessity for Multirole Combat Aircraft for Indian Air Force (IAF), Government of India would like to acquire 36 Rafale jets in fly-away condition. Both the sides also agreed to conclude an Inter-Governmental Agreement (IGA) for supply of the aircraft. A Negotiating Team had been constituted to negotiate the terms and conditions of the procurement of 36 Rafale jets and recommend a draft agreement. The Negotiations were underway and IGA & Offset Contract were yet to be finalized. The details including transfer of technology through offsets will emerge after the negotiations are completed. The Rafale aircraft being procured would have advanced features like Advanced Electronically Scanned Array Radar, mid-air refuelling and advanced Electronic Warfare equipment as part of its design. This information was given by Defence Minister Shri Manohar Parrikar in a written reply to Dr. T Subbarami Reddy in Rajya Sabha 19 July 2016.

In late 2016, Indian business tycoon Anil Ambani announced a joint venture of his company, Reliance Defence, with Dassault Aviation. Problems began emerging two years later, when former French President Hollande told French website Mediapart that his government did not have any say in choosing Dassault's manufacturing partner in India and that Reliance Defence was nominated by the Indian government. Soon after, Dassault Aviation released a statement claiming the decision to choose Reliance was their own.

India's opposition Congress party, including its leader Rahul Gandhi, accused Prime Minister Modi's government of unfairly awarding the contract to Reliance Defence instead of state-owned aeronautics firm HAL. They also accused him of paying three times the amount that was initially agreed upon. Following petitions to investigate graft allegations, the Indian Supreme Court said in December 2018 that it found "no occasion to doubt the process" of signing the deal with Dassault Aviation.

On February 13, 2019, a report from the Comptroller and Auditor General (CAG), Rajiv Mehrishi, who audits all funds and expenses by the Indian government, said the Indian government under Modi paid 2.8 percent less than the amount agreed upon by the previous government under Congress' Singh. However, the report that was tabled in India's upper house of parliament, the Rajya Sabha, does not include the aspect of pricing. India's Ministry of Defense has said data pertaining to pricing was confidential. Furthermore, the report may be perceived as biased, considering that Mehrishi was the finance secretary in the federal government – and thus a negotiator - when the deal was signed in 2016.

The Rafale deal signed by the Modi government to procure 36 fighter jets from France’s Dassault got 2.86 per cent cheaper price than what was negotiated during the previous UPA regime in 2007, the much-awaited CAG report on the controversy-hit transaction showed on 27 February 2019. Without disclosing pricing details in absolute terms, the Comptroller and Auditor General (CAG) also said the deal was 6.54 per cent expensive in terms of engineering support package and performance-based logistics for the Indian Air Force, while the training costs has got 2.68 percent expensive than the 2007 offer.

The CAG also flagged the drawbacks of settling for a ‘Letter of Comfort’ rather than a sovereign guarantee by the French government and said Dassault benefitted due to absence of such guarantees. The report, however, was silent on the issue of offset partners, which has been a key point on which the Congress has been attacking Narendra Modi-led government and has been alleging corruption in Anil Ambani’s Reliance Group getting one of the offset contracts.

Soon after the report was tabled in Parliament, Union Minister Arun Jaitley said the lies of the Congress and opposition parties stand exposed as the CAG report outlines that 2016 deal terms were lower in terms of price, faster in terms of delivery, while ensuring better maintenance and lower escalation.

On India-specific enhancements, CAG said the NDA deal was 17.08 per cent cheaper than the one negotiated by the then UPA government in 2007, while the weapons package offered in the new deal was 1.05 per cent cheaper, the 157-page report said. For the overall price, the CAG has said the new deal is 2.86 percent cheaper. Defence Minister Nirmala Sitharaman has earlier said the deal struck by Modi government was 9 per cent cheaper than what was being negotiated by the Congress-led UPA government.

Congress, on the other hand, had been alleging that the price increased to Rs 1,600 crore per aircraft in the deal signed by the Modi government, as against Rs 520 crore during the UPA time. In its report, the CAG has highlighted the drawbacks of settling for a ‘Letter of Comfort’ rather than a sovereign guarantee by the French government. It noted that the deal which was being negotiated in 2007 included a 15 per cent bank guarantee against advance payments.

The training aspects covered under the deal is also 2.68 percent expensive than the 2007 offer, the report said. In the 2007 offer of 126 fighter jets, Dassault Aviation was to provide basic training to 26 pilots and 76 technicians at a certain cost. In 2015 deal for 36 Rafale fighter jets, the IAF increased the scope of training to 27 pilots, 146 technicians and two engineers.

The Modi government had been facing a torrent of attacks by Congress and its chief Rahul Gandhi over the fighter jet deal. Gandhi had dubbed the CAG report on the Rafale deal as “Chowkidar Auditor General” report. “That CAG report is a worthless report. I would term it as a ‘Chowkidar Auditor General Report’. It is Narendra Modi’s report, written for the chowkidar, on behalf of the chowkidar, for the chowkidar, by the chowkidar,” he had said.

Following the report becoming public, Union Finance Minister Arun Jaitley hit out at the main opposition party. “It cannot be that the Supreme Court is wrong, the CAG is wrong and only the dynast is right. Satyameva Jayate” – the truth shall prevail. The CAG Report on Rafale reaffirms the dictum,” Jaitley stated.

India received the first batch of three dozen Rafale fighter jets purchased from France in a multi-billion-dollar deal in 2016, amid heightened military tensions with neighboring Pakistan over the disputed Kashmir. The jets were handed over to Indian Defense Minister Rajnath Singh at a ceremony held at the Dassault Aviation factory near Bordeaux in southwestern France on 08 October 2019.

Of the 36 jets, 30 will be fighter jets and six will be trainers. The trainer jets will be twin-seater and they will have almost all the features of the fighter jets. In July 2020 India recently received delivery of five Rafale fighter jets. The aircraft likely to arrived at Air Force Station, Ambala, on 29 Jul 20 subject to weather. No 17 Squadron, the “Golden Arrows”, was being raised at this base equipped with Rafale aircraft. with a former Indian air chief marshal boasting that the French-made warplanes' capability is superior to China's J-20 stealth fighter jet. In a report by the Hindustan Times on 30 July 2020, India's former air chief marshal B.S. Dhanoa claimed that the Rafale "is a game changer, and the Chinese J-20 does not even come close." Chinese experts said that the Rafale is only a third-plus generation fighter jet, and does not stand much of a chance against a stealth, fourth generation one like the J-20.

The opposition publication the Hindu published the revelations of Indian pilots who seriously criticized the Rafale, speaking of its obsolescence, low speed and lack of maneuverability. Then the pandemic began and the production of Indian Rafals was again suspended, which infuriated the current leaders of the Indian military department. But the clauses of the contract left no chance for the Indian military. The penalty for refusing to purchase, like the price of the aircraft, was also astronomical. The last major problems with the Frenchman concerned air refueling. The system turned out to be so specific that six more Airbus A-330MRTT tanker aircraft had to be purchased for it. And this is at least another one and a half billion dollars to the already fabulously expensive contract.

A French judge was tasked with investigating a controversial 2016 multi-billion-dollar sale of Rafale fighter jets to India on “corruption” suspicions, the national financial prosecutors’ office (PNF) said 02 July 2021. The 7.8-billion-euro ($9.3-billion) deal for 36 planes between the Indian government and French aircraft manufacturer Dassault had long been mired in corruption allegations. The PNF had initially refused to investigate the sale, prompting French investigative website Mediapart to accuse it and the French Anti-corruption Agency of “burying” suspicions surrounding the September 2016 deal.

In April 2021, Mediapart claimed “millions of euros of hidden commissions” were given to a go-between who helped Dassault conclude the sale, of which “some... could have been given as bribes” to Indian officials. Dassault retorted that no wrong-doing was flagged in the group’s audits. After the reports, France’s Sherpa NGO, which specialises in financial crime, filed an official complaint for “corruption” and “influence peddling” among other accusations, prompting an investigating magistrate to be designated to probe the deal.

Sherpa had already asked for an investigation into the deal in 2018, but the PNF took no action. In this first complaint, the NGO had denounced the fact that Dassault chose Reliance Group as its Indian partner, a conglomerate headed by billionaire Anil Ambani, who is close to Prime Minister Narendra Modi.




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Page last modified: 13-09-2021 14:51:02 ZULU