The Congress and BJP are once again at loggerheads over the cost of India’s largest defence procurement deal – the Rafale deal. Proposed in 2007 and inked in 2016, the wait for the Rafale fighter jets has spanned over a decade. In the meantime, the Governments of India and France have changed, and so have terms of the contract signed – and allegedly the prices too.
What are the terms of the Rafale deal? Why the massive delay in procuring the jets from France? How much does the contract cost India?
Explained: Decoding India’s Endless Wait For Rafale Jets
1. What Are Rafale Jets?
Built by the French firm, Dassault Aviation, Rafale jets are twin-engine Medium Multi-Role Combat Aircraft (MMRCA). Dassault describes Rafale as “Omnirole” jets that are versatile and can adapt to meet all air mission requirements.
The Rafale participates in permanent “Quick Reaction Alert” (QRA)/air-defense/air sovereignty missions, power projection and deployments for external missions, deep strike missions, air support for ground forces, reconnaissance missions, pilot training sorties and nuclear deterrence duties.
Dassault AviationApart from the 36 Rafale jets that were ordered by India, Dassault also manufactured 132 Rafale aircrafts for the French Air Force and has received contracts for 24 jets for Egypt and 24 jets for Qatar.
According to an Indian Express report, former Indian Air Force chief Arup Raha termed Rafale an excellent aircraft and said, “It is tremendously capable in all its roles. It is a multi-role aircraft and can be used very effectively. It can prove its worth in any situation.”
Expand2. How Did India Zero-in On Rafale Jets?
While the need for additional fighter jets was realised by the Ministry of Defence in 2000, a formal Request For Proposal (RFP) for Medium Multi-Role Combat Aircrafts was not issued before 2007. Between 2000-2012, the Indian Air Force’s strength declined to 34 squadrons as many jets were rendered obsolete. Each squadron consists of 18 jets and to reach its optimum capability, India requires 42 squadrons of fighter jets.
Since the present Indian Air Force fleet mostly consists of heavy and light-weight combat aircraft, the Central Government decided to buy medium-weight fighter jets.
The RPF for procurement of 126 MMRCA was finally issued in 2007 under the Manmohan Singh led UPA government. This took place after the original proposal to buy 126 fighter aircraft was first mooted during Atal Bihari Vajpayee’s NDA government.
In a bid to acquire the massive contract of 126 fighter jets, six international aircraft manufacturers placed their bids- Boeing’s F/A-18s, Russia’s MiG-35, Sweden’s Saab’s Gripen, Lockheed Martin’s F-16s, Eurofighter Typhoon, and Dassault’s Rafale. After being thoroughly tested, Eurofighter and Rafale were shortlisted for the tender. Dassault managed to bag the contract as it was the lowest bidder and also comparatively low maintenance.
The bidding process took place under the UPA Government, headed by the then defence minister AK Antony. According to the deal, out of the 126 jets bought, 18 would be received by India in fly-away condition and the rest would be built in India at the Hindustan Aeronautics facility under transfer of technology.
Expand3. Why The Delay in Finalising the Deal?
While initially the deal with Dassault was estimated to be worth $10.2 billion (Rs 54,000 crore) in 2007, negotiations between India and the French manufacturing company started only in 2012. By April 2015, however, terms of negotiation between the Narendra Modi led NDA Govt and Dassault Aviation changed.
The Indian Government signed an inter-governmental agreement for the supply for aircraft. Which meant, instead of dealing with Dassault Aviation, India would be dealing with the French Government. India’s requirement too changed due to the pressing need for more fighter jets – instead of 18 fly-away jets, the Indian Defence Ministry sought 36 Rafale jets in fly-away condition at a cost of Rs 58,000 crore.
According to reports by The Times of India, Transfer of Technology was the primary issue of concern between the two sides. Dassault Aviation was allegedly not willing to take the responsibility of quality control of producing 108 aircraft in India. While Dassault provisioned for 3 crore man-hours for production of the aircraft in India, Hindustan Aeronauticals Limited's (HAL) estimate was nearly 3 times higher, escalating costs manifold.
Former Defence Minister Manohar Parrikar exchanging the Rafale contract document with his French counterpart Jean-Yves Le Drian. (Photo Courtesy: Twitter) The new deal with 36 Rafale jets was finally signed on September 2016 by then Defence Minister Manohar Parrikar. According to reports by The Indian Express, specifics of the deal included providing free training to 10 IAF personnel, including three pilots, estimated to be worth Euro 100 million. The IAF will also get a guarantee for an additional 60 hours for the trainer version of Rafale fighters and a concession to keep the weapons storage in France for an additional six months without any charge. The French also agreed to supply spares for a period of seven years at initial cost.
According to a report by The Hindu, the price of an aircraft was about Rs 740 crore and India wanted to buy them for at least 20 percent lower.
Expand4. So, How Much Do The Jets Cost Now?
The Defence Ministry has refused to divulge details. The Congress has termed the deal as ‘the great Rafale mystery’. Congress President Rahul Gandhi took to social media, demanding financial details on the deal from Prime Minister Narendra Modi and Defence Minister Nirmala Seetharaman.
While addressing the Parliament, Finance Minister Arun Jaitley accused the Congress of manufacturing allegations against the BJP Government. Jaitley accused the Congress Government too of maintaining secrecy over defence deals during its regime. The Defence Ministry issued a statement, terming the demand to disclose details on the Rafale contract ‘unrealistic’.
The demand that the Government disclose the details and value of the contract for the Rafale aircraft contracted in 2016 is unrealistic. [In keeping with confidentiality requirements, the UPA Government had also expressed its inability to disclose the price of various defence procurements, including in its responses to Parliament Questions].
Defence Ministry StatementThe Defence Ministry also stated that the approximate acquisition cost of the Rafale aircraft has already been provided to the Parliament.
Provision of exact item-wise cost and other information will reveal, inter alia, details regarding the various customizations and weapons systems specially designed to augment the effectiveness and lethality of the assets, impact our military preparedness and compromise our national security. Such details would also come under the ambit of the security agreement signed in 2008. Thus, in not revealing the item-wise details of the contract, the Government is merely following in letter and spirit the confidentiality provisions of a bilateral India-France Agreement of 2008 signed by the previous Government.
Defence Ministry StatementRahul Gandhi, however, countered the Government’s claim by posting details of former defence deals disclosed by the UPA government in Parliament.
Congress also alleged that the BJP government promoted the interests of Anil Ambani-owned Reliance Defence Limited (RDL) after RDL entered into a joint venture with Dassault Aviation. RDL was chosen as Dassault Aviation’s Indian strategic partner to meet an offset clause in the deal which specified that 50 percent of the amount in the deal needs to be invested into the Indian defence ecosystem.
Irked by the allegations levelled by Congress, RDL threatened to take legal action.
According to reports, RDL issued a statement that said, "Government policy issued on 24 June 2016 allows for 49% FDI in the Defence Sector under the automatic route, without any prior approval. No approvals from the Union Cabinet or CCS were required for the formation of the aforesaid Joint Venture company under the automatic route”.
While the Rafale jets are reportedly expected to arrive in India anytime between 2019 and 2022, defence experts believe India still remains in urgent need of more fighter jets – at least 144 at present just to retain its edge in combat.
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)
Expand
What Are Rafale Jets?
Built by the French firm, Dassault Aviation, Rafale jets are twin-engine Medium Multi-Role Combat Aircraft (MMRCA). Dassault describes Rafale as “Omnirole” jets that are versatile and can adapt to meet all air mission requirements.
The Rafale participates in permanent “Quick Reaction Alert” (QRA)/air-defense/air sovereignty missions, power projection and deployments for external missions, deep strike missions, air support for ground forces, reconnaissance missions, pilot training sorties and nuclear deterrence duties.Dassault Aviation
Apart from the 36 Rafale jets that were ordered by India, Dassault also manufactured 132 Rafale aircrafts for the French Air Force and has received contracts for 24 jets for Egypt and 24 jets for Qatar.
According to an Indian Express report, former Indian Air Force chief Arup Raha termed Rafale an excellent aircraft and said, “It is tremendously capable in all its roles. It is a multi-role aircraft and can be used very effectively. It can prove its worth in any situation.”
How Did India Zero-in On Rafale Jets?
While the need for additional fighter jets was realised by the Ministry of Defence in 2000, a formal Request For Proposal (RFP) for Medium Multi-Role Combat Aircrafts was not issued before 2007. Between 2000-2012, the Indian Air Force’s strength declined to 34 squadrons as many jets were rendered obsolete. Each squadron consists of 18 jets and to reach its optimum capability, India requires 42 squadrons of fighter jets.
Since the present Indian Air Force fleet mostly consists of heavy and light-weight combat aircraft, the Central Government decided to buy medium-weight fighter jets.
The RPF for procurement of 126 MMRCA was finally issued in 2007 under the Manmohan Singh led UPA government. This took place after the original proposal to buy 126 fighter aircraft was first mooted during Atal Bihari Vajpayee’s NDA government.
In a bid to acquire the massive contract of 126 fighter jets, six international aircraft manufacturers placed their bids- Boeing’s F/A-18s, Russia’s MiG-35, Sweden’s Saab’s Gripen, Lockheed Martin’s F-16s, Eurofighter Typhoon, and Dassault’s Rafale. After being thoroughly tested, Eurofighter and Rafale were shortlisted for the tender. Dassault managed to bag the contract as it was the lowest bidder and also comparatively low maintenance.
The bidding process took place under the UPA Government, headed by the then defence minister AK Antony. According to the deal, out of the 126 jets bought, 18 would be received by India in fly-away condition and the rest would be built in India at the Hindustan Aeronautics facility under transfer of technology.
Why The Delay in Finalising the Deal?
While initially the deal with Dassault was estimated to be worth $10.2 billion (Rs 54,000 crore) in 2007, negotiations between India and the French manufacturing company started only in 2012. By April 2015, however, terms of negotiation between the Narendra Modi led NDA Govt and Dassault Aviation changed.
The Indian Government signed an inter-governmental agreement for the supply for aircraft. Which meant, instead of dealing with Dassault Aviation, India would be dealing with the French Government. India’s requirement too changed due to the pressing need for more fighter jets – instead of 18 fly-away jets, the Indian Defence Ministry sought 36 Rafale jets in fly-away condition at a cost of Rs 58,000 crore.
According to reports by The Times of India, Transfer of Technology was the primary issue of concern between the two sides. Dassault Aviation was allegedly not willing to take the responsibility of quality control of producing 108 aircraft in India. While Dassault provisioned for 3 crore man-hours for production of the aircraft in India, Hindustan Aeronauticals Limited's (HAL) estimate was nearly 3 times higher, escalating costs manifold.
The new deal with 36 Rafale jets was finally signed on September 2016 by then Defence Minister Manohar Parrikar. According to reports by The Indian Express, specifics of the deal included providing free training to 10 IAF personnel, including three pilots, estimated to be worth Euro 100 million. The IAF will also get a guarantee for an additional 60 hours for the trainer version of Rafale fighters and a concession to keep the weapons storage in France for an additional six months without any charge. The French also agreed to supply spares for a period of seven years at initial cost.
According to a report by The Hindu, the price of an aircraft was about Rs 740 crore and India wanted to buy them for at least 20 percent lower.
So, How Much Do The Jets Cost Now?
The Defence Ministry has refused to divulge details. The Congress has termed the deal as ‘the great Rafale mystery’. Congress President Rahul Gandhi took to social media, demanding financial details on the deal from Prime Minister Narendra Modi and Defence Minister Nirmala Seetharaman.
While addressing the Parliament, Finance Minister Arun Jaitley accused the Congress of manufacturing allegations against the BJP Government. Jaitley accused the Congress Government too of maintaining secrecy over defence deals during its regime. The Defence Ministry issued a statement, terming the demand to disclose details on the Rafale contract ‘unrealistic’.
The demand that the Government disclose the details and value of the contract for the Rafale aircraft contracted in 2016 is unrealistic. [In keeping with confidentiality requirements, the UPA Government had also expressed its inability to disclose the price of various defence procurements, including in its responses to Parliament Questions].Defence Ministry Statement
The Defence Ministry also stated that the approximate acquisition cost of the Rafale aircraft has already been provided to the Parliament.
Provision of exact item-wise cost and other information will reveal, inter alia, details regarding the various customizations and weapons systems specially designed to augment the effectiveness and lethality of the assets, impact our military preparedness and compromise our national security. Such details would also come under the ambit of the security agreement signed in 2008. Thus, in not revealing the item-wise details of the contract, the Government is merely following in letter and spirit the confidentiality provisions of a bilateral India-France Agreement of 2008 signed by the previous Government.Defence Ministry Statement
Rahul Gandhi, however, countered the Government’s claim by posting details of former defence deals disclosed by the UPA government in Parliament.
Congress also alleged that the BJP government promoted the interests of Anil Ambani-owned Reliance Defence Limited (RDL) after RDL entered into a joint venture with Dassault Aviation. RDL was chosen as Dassault Aviation’s Indian strategic partner to meet an offset clause in the deal which specified that 50 percent of the amount in the deal needs to be invested into the Indian defence ecosystem.
Irked by the allegations levelled by Congress, RDL threatened to take legal action.
According to reports, RDL issued a statement that said, "Government policy issued on 24 June 2016 allows for 49% FDI in the Defence Sector under the automatic route, without any prior approval. No approvals from the Union Cabinet or CCS were required for the formation of the aforesaid Joint Venture company under the automatic route”.
While the Rafale jets are reportedly expected to arrive in India anytime between 2019 and 2022, defence experts believe India still remains in urgent need of more fighter jets – at least 144 at present just to retain its edge in combat.
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)