India, Dassault MMRCA Contract Likely In 2013 Following Delays In Negotiations

India and Dassault will most likely sign the contract for the MMRCA deal, scheduled to be concluded by the end of this year to 2013. Neither side has made known a new timeline for the commercial negotiations to be concluded. Although the Indian MoD and Dassault were said to have entered the final negotiations earlier in March, the two are still currently trying to on settle the pricing for the aircraft, offsets, transfer of technology. The delay could also be a result of Hindustan Aeronautics Limited’s role in the multi-billion dollar MMRCA deal; which Dassault has asked the Indian Ministry of Defense to formally identify. Eighteen of the 126 planes are to be purchased directly from Dassault, while HAL will manufacture the other 108 under a licence at an upcoming facility in Bangalore. HAL will have to be tooled up and ready to absorb the technology months before the kits arrive from France. Once the contract is underway, it will have a very short timeframe to prepare itself to set up an entirely new assembly line for the Rafale fighters. According to a report published by a French publication Usine Nouvelle earlier this year, Dassault might actually end up producing more than 18 aircraft in France than originally agreed to because “they (some 500 French companies) would still get far more than 50% of the production associated with the future contract during the initial years”. The report also adds that although “the RFP originally demanded offsets of 50% of the contract value and technology transfers, several factors could explain this work division that is so favorable for French industry”. The Indian government has this year mandated that transfer of technology could be counted as offsets, though it might not apply to the MMRCA as this tender was floated under the earlier procurement policy. This also could be a an issue of contention in the commercial negotiations as the MMRCA contracts mandates 50% offsets. “I find no reason why it shouldn't be signed by the end of this month or next month", Air Officer Commanding-in-Chief, Training Command, IAF, Air Marshal Rajinder Singh said on Sept 8, according Indian wire service reports. Meanwhile, German and Russian officials have spoken out claiming that the negations were unclear. Vyacheskav Dzirkaln, Deputy Director of Russia's Federal Service for Military Technical Cooperation, was recently quoted as saying, "I wouldn't say that MMRCA tender is a closed issue. We have information that the tender is still up in the air". India has, however, made it clear that it will not refloat the tender. A senior official was quoted as saying “There have been no backdoor level talks going on with any losing competitor”. Russia's MiG-35 failed to make the shortlist after it failed in Technical evaluation level, EADS Eurofighter Typhoon also lost out to the Rafale. By Bindiya Thomas