Dassault Woos India Sensing MMRCA Deal Conclusion

The 18-month long negotiations between Dassault and India over the Rafale MMRCA deal may be heading to a conclusion, if information pieced together from various sources is to be believed.

On the Indian Air Force’s 81st anniversary last week, Dassault used the local media to congratulate the IAF by posting advertisements about the Rafale under a congratulatory banner.

“For the normally media-shy Dassault which did not even hold a customary press conference during the Aero India show earlier this year, despite winning one of the biggest fighter deals in the world, the current media blitz shows something is brewing”, said a source familiar with the developments.

Since India awarded Dassault the contract to supply 126 fighter aircraft last year, then estimated to be worth $12 billion, negotiations have run into difficulty over transfer of technology and about the status of the lead integrator.

Dassault was expected to provide 18 Rafale fighter jets in "fly-away" condition while state-run Hindustan Aeronautics Limited(HAL) was to manufacture the rest in India. Until a couple of months ago, Dassault was reported to pushing for two separate contracts to be signed - one for the ready-made jets, and another for the rest to be built by HAL; a proposal supposedly rejected by India.

However, India’s dire need to supplement its depleting fighter aircraft fleet with multi-role fighter aircraft may be pushing it to take a less rigid stance at the negotiation table. One line of argument going around is that India would increase the order of jets to be flown in from France to 25 or 30 up from 18, until a way out has been found over technical and other issues concerning the manufacture of the remaining 90 or 100 aircraft in India.

This would give both parties about two years to get their act together given that the Dassault factory in France can only assemble about 25-30 planes in a year of which slightly less than half is committed to the French Air Force.

While the upcoming 2014 general elections are often cited as a reason for delaying the signing of the contract, even if negotiations do come to a completion, pressure from the Indian Air Force (IAF) may force the government to allocate funds for the purchase even in an election year.

 When asked at a press conference last week, about the depleting fleet, IAF chief NAK Browne said, "If the MMRCA deal isn't signed, there will be a rapid decline in fighter numbers between 2017 and 2022. It is imperative that the deal is signed quickly".

“RAFALE International sees the MMRCA program as much more than a mere acquisition process. It is the opportunity to develop a large scale strategic partnership and industrial cooperation between India & France covering in-depth technological and production cooperation,” Dassault says on its Rafale India website. “The offer is also totally supported by the strong political commitment of France towards India in all fields of Defense cooperation.”

Dassault has entered into a joint venture agreement with the Anil Ambani owned Reliance Industries to manufacture aircraft spares in India, presumably as part of the offsets program.