Facts about India-France Rafale deal

 

Gujarat Election is round the corner and contesting parties are not leaving a stone unturned . Both the BJP and the Congress are into election mode and trying to play holier than thou . Congress is presenting Rahul Gandhi in a completely new avataar while BJP is banking on Modi’s popularity and looking to continue its juggernaut  . Taunts , blames , accusitions are being fired from both the sides , as a result of which India-France Rafale deal is again in news these days . We will try to enlist all the queries/facts around this deal .

Also Read: An essay on education in India

1.What is France-India Rafale deal ? 
Indian Airforce largely consists of  light and heavy weight combat aircraft . So the decision was taken to add medium weight combat aircraft carriers to bridge the gap of required air fleet of 42 squadrons for the IAF . The decision was taken by the GOI lead by Atal Bihari Vajpayee in 2001 . The Initial bidders were :-

Lockheed Martin’s F-16s,
Boeing’s F/A-18s,
Eurofighter Typhoon,
Russia’s MiG-35,
Sweden’s Saab’s Gripen and  ,
Rafale.

Finally Rafale won the bid as L1(lowest bidder) to provide India with 126 Rafale fighter jets out of which 18 were to be delivered in fly-away condition and 108 to be manufactured by HAL in India . The initial bid put up by Dassault for this deal was $10.2 billion (INR 54,000 crore) .

2. What is the sequence of events which took place in relation to the Rafale deal ?                                                    2001:Inception of the plan to add medium weight combat aircrafts .
2007:Two planes named a)Rafale fighter jets and b)Eurofighter Typhoon make it to the final round
2012:Rafale fighter wins the bid as L1(lowest bidder) and comes closer to clinch the deal
2012:Negotiations started on the final cost of the deal
2012-2014:UPA Govt and Dassault could not come to a common ground and the deal remain stalled
2015:Prime Minister Narendra Modi visited Paris in April and signed an MOU to buy 36 Rafale fighter jets from Dassault via govt.-to-govt. deal though the cost was still not finalised .                                    
2016: Deal is finally sealed for $7.8 billion to get 36 Rafale fighter jets in a fly-away condition.
2017:Congress raises question over the deal .

Then Defence Minister Manohar Parikar with his French counter-part

3.What is the controversy around this deal ?

In 2012 when Dassault won the deal as a lowest bidder the total cost of providing 126 fighter jets to India was INR 54000 crores . Under this deal India was to recieve 18 Rafale jets in fly-away condition and rest 108 were to be manufactured in India by HAL . But the deal was never signed physically as both the parties could not come to conclusion over the cost that would be incurred in manufacturing the Rafale jets in India which was around 3 times the cost of manufacturing in France . To this 3.9% inflation cost per annum was also added to the deal . The question on what basis Dassault was given the bid remains unanswered. Till 2014 there was no clarity on the total cost of the deal . While estimated price of a single Rafale aircraft to be delivered in a fly-away condition stood around 740 crores approx. as per the deal done by UPA .

Calculation to understand deal under UPA:-

Each plane costs =INR 740 crores approx.                      18 jets cost = 740 crores   x   18 = INR 13320 crores approx.                                                                                  Cost estimated by Dassault initialy for 108 Rafale aircrafts (to be manufactured in India) = 54000 cr – 13320 cr = INR 40,000 crore approx                                                    HAL estimates actual efforts for 108 Rafale aircrafts to be thrice of what estimated by Dassault , which takes the cost of manufacturing of  108 Jets in India three times to = 40,000 crore   x   3 = 120,000 crores .

Hence total cost of the deal under UPA would have been around = 120,000 crore + 13320 crore = 134,000 crores for 126 fighter jets while Dassault estimated it at just 54000 crores . This shows that the terms of the deal was never clear  .

This takes the deal to a completely out-of-budget figures clearly speaking volumes as to why was the deal not finalised and remain stalled .

When NDA Govt. came into power , the deal was revised with new clauses :-

Calculations to understand deal under NDA:-

Total cost of 36 jets to be delivered to India in fly-away condition = 23000 crores(each jet=640 cr)
Cost of integration of Israeli helmet mounted displays = 13000 crores
Cost of armaments to be installed = 5000 crores

*Other operational cost = 15000 crores .

Other operational cost includes :-                                    Dassault to make sure that at any given point of time 75% of the fleet remains operational and this warranty will be signed for 5 years . Current fleet operational usage is around 60%  which was 48% before 2014                                                                            Free training for 9 IAF personnel
60 hours of usage of trainig aircraft for Indian pilots
6 months of free weapon storage .

Negotiations done under NDA govt. was on price as on today and the European Inflation Indices cap was kept at 3.5% while in UPA govt. price was calculated on fixed price model which allowed Dassault to include 3.9% of Inflation indices per year .

4.Reliance-Dassault Joint Venture

As per the defence FDI implemented , any foreign company can   get  into joint venture with Indian company in 49:51 stakes . As there was no technology transfer happening in the deal till now Dassault went into venture with Reliance to provide operational supprort to Rafale fighters once they are inducted . HAL came into picture only when the manufacturing of the jets in India were being finalised in UPA regime but due to disagreement between HAL and Dassault over the effort and cost estimation of 108 jets the deal remained stalled for over two years  . Hence NDAs move to scrap the previous deal and bring in the new one was an example of smart and decisive leadership .

 

Hence the decisive policy of getting 36 jets in a fly-away condition would help IAF reduce its burden on dying older jets and reduce the gap to have 42 squadrons to combat two front war .

 

 

 

 

 

 

 

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