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Why is cost of Rafale fighter jets such a 'secret'? All you need to know about the India-France deal

Congress president Rahul Gandhi slammed the Narendra Modi government for maintaining "secrecy" over the deal with France for 36 Rafale fighter jets after Defence Minister Nirmala Sitharam told Parliament on Tuesday that its details were "classified information" and could not be disclosed. The Congress also termed the deal as "the great Indian mystery", and claimed that a "huge scam" was brewing as due procedures in the purchase of aircraft were not followed and the jets were bought off the shelf "like oranges".

While the Opposition has levied charges of corruption against Modi and the BJP, here is all you need to know about the Rafale deal.

What are Rafale jets?

Manufactured by French company Dassault Aviation, Rafale is a twin-engine medium multi-role combat aircraft (MMRCA). Rafale fighter jets are positioned as 'omni-role' aircrafts that are capable of performing a wide range of combat roles, such as air supremacy, interdiction, aerial reconnaissance, ground support, in-depth strike, anti-ship strike and nuclear deterrence.

The Indian Air Force (IAF), which requires a minimum of 42 fighter squadrons to achieve optimal capability, declined down to 34 squadrons between 2000-2012 due to obsolescence. The original proposal to buy 126 fighter aircraft was first mooted during the Atal Bihari Vajpayee's NDA government. The RFP for procurement of 126 MMRCA was finally issued in 2007. Reportedly, IAF conducted technical evaluations and flight evaluations and declared that Rafale and Eurofighter Typhoon had met its criteria in 2011.

 Why is cost of Rafale fighter jets such a secret? All you need to know about the India-France deal

File image of a Rafale fighter jet. Image/Wikimedia Commons

Why does India want the Rafale jets

According to a report in The Hindu, Rafale jets weren't India's only option, several international aviation manufacturers expressed interest when they got to know about the Indian government's "mammoth" plan to revamp its IAF fleet by introducing MMRCAs.

In order to replace the existing MiG-21 aircraft, a case to procure 126 Mirage-2000 aircraft was initiated in 2000, which was later converted to a procurement of 126 MMRCAs. A Request For Proposal (RFP) was issued in 2007. The RFP was formally withdrawn on 24 June, 2015.

Six well-known aircraft manufacturers bid to bag the contract of 126 fighter jets which was dubbed as the largest-ever defence procurement deal of India. 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 Dassault's Rafale.

IAF tested all aircraft and after a thorough analysis, Eurofighter and Rafale were shortlisted. Dassault got the contract as they were the lowest bidders and their aircraft was low maintenance compared to others.

India and France signed the inter-government agreement for buying 36 Rafale fighters, off the shelf, on 23 September, 2016, following long negotiations on the deal, agreed upon during Modi's visit to France in April 2015.

The BJP-led NDA began negotiating the Project 75 Scorpene contract with France in 2001, but the succeeding Congress Party-led United Progressive Alliance eventually concluded the purchase in October 2005, 18 months after forming the government. Discussions between Dassault and the UPA began in early 2012 for 126 Rafales.

There was no deal under the UPA government as Transfer of Technology remained the primary issue of concern between the two sides. Moreover, Dassault Aviation was unwilling to take responsibility of quality control for the production of 108 aircraft in India. While Dassault provisioned for three crore man-hours for production of the aircraft in India, HAL's estimate was nearly three times higher, escalating costs manifold, reports said.

Procurement process

A demand for additional fighter jets was put forward by IAF in 2001. The current IAF fleet, reportedly, largely consists of heavy and light-weight combat aircraft. So, the Ministry of Defence considered bringing in intermediate medium-weight fighter jets. The actual process of procurement began only in 2007. Headed by the then Defence Minister AK Antony, the Defence Acquisition Council approved the RFP to buy 126 aircraft in August 2007, which kickstarted the bidding process.

Why a delay in finalising the deal?

Initially, the Rafale deal was estimated to be worth $10.2 billion (Rs 54,000 crore). The deal included acquiring 126 aircraft, 18 of them in fly-away condition and the rest to be made in India at the HAL (Hindustan Aeronautics Limited) facility under transfer of technology.

However, after they won the contract in 2001, India and Dassault started the negotiations in 2012. The negotiations have stretched on for almost four years now.

Due to elections in both the countries and the subsequent change in governments in both the countries, negotiations were in a limbo. Pricing was another issue. Even during the signing of the purchase agreement, both the sides couldn't reach a conclusion on the financial aspects. The Economic Times reported that the price of an aircraft was about Rs 740 crore and India wanted them for at least 20 percent lesser cost.

This was one of the questions posed by the Congress in Parliament on Tuesday. "Rafale and Eurofighter Typhoon were both found equals on all technical requirements. On 4 July, 2014, Eurofighter Typhoon offered to reduce prices by 20 percent. Why did Modi and the defence minister not take notice of this subsisting offer?"

The Congress asked, "Is it correct that per aircraft pricing of Rafale as per UPA negotiation comes to $ 80.95 million (Rs 526.1 crore) as against Modi government's per aircraft negotiated price of $241.66 million (Rs 1570.8 crore) as per current exchange rate? Who is responsible for 'loss to exchequer'?"

Though the Indian government had initially planned to buy 126 jets, they scaled it down to 36, that too in ready condition.

NDA government, however, insisted that it got a better deal than the UPA government (price wise) with a total reported saving of more than €1,600 million (€350 million on the cost of aircraft with a further reported saving on weapons, allied maintenance and training package amounting to an around €1,300 million or Rs 12,600 crores), The Times of India reported.

A cost breakdown of Rafale in the original bid under UPA and in the 36 aircraft in the government-to-government deal under NDA are not in the public domain.

Rafale deal is important for both India and France: Here's why

At a time when India and the US were aiming at better relations, New Delhi picked French company Dassault over US' Lockheed and Russia's MiG, which was India's traditional partner. For the French, Rafale jets are being used mostly by France, and a few by Egypt and Qatar.

Dassault is hoping that export of the fighter jets will help the company meet its revenue targets. Meanwhile, procurement of combat aircraft is long overdue for the IAF. Experts have said that further delay can only make things worse. This deal is India's biggest-ever procurement. In the effectiveness of the Rafale deal lies the future of other defence procurements.

Rafale jets were also used in Libyan airstrikes but since India is the first country which agreed to buy the fighter jets, the French hope that once the deal is sealed other nations could express its willingness to buy more Rafales.

With inputs from agencies

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Updated Date: Feb 07, 2018 16:11:21 IST