New Delhi: Bemused by Chief of Defence Staff (CDS) Gen Bipin Rawat’s comments that India will stagger the purchase of 110 fighter jets, foreign companies are set to approach the Indian Air Force (IAF) for clarity on what happens to the mega-contract under which planes are to be built in India through a strategic partnership.
Industry sources said that a staggered purchase hands an advantage to the French firm Dassault Aviation, which already has a contract for 36 fighters.
They also said that there is no scope for actual Make in India in a staggered purchase process unless one is talking about assembling kits of some number of aircraft in the country. This is contrary to the earlier plan to manufacture them through a strategic partnership.
The Print had reported in August 2019 that there is a growing view in the government and the IAF that rather than focusing on pure numbers in terms of squadron strength, more thought should be given to the capability of the systems.
What the firms say about the CDS’ comments
The firms in contention told ThePrint that they are “confused” by the CDS’ comments.
“This is really confusing. If the CDS says there will be staggered purchase, then what happens to the Request for Proposal (RFP) for 110 fighters that we have been waiting for? Will there be any RFP,” a senior official of a foreign firm in the race for the IAF contract told ThePrint.
Another official of a different firm questioned what happens to the Make in India initiative.
“There will be no Make in India possible for a limited number of fighters,” the second official said underlining that a large order would help compensate for the hard work and the investment that one will have to put in for Make in India.
A representative of a third Original Equipment Manufacturer (OEM) said that there needs to be clarity on what exactly India is looking at so that the companies can offer that as per the demand.
“It makes no sense to come out with an RFP for 110 or 114 fighters when the inside thinking is that the purchase needs to be staggered,” the representative said.
All the company officials that ThePrint spoke to said that they will seek clarifications from the IAF.
Industry sources said that it is a clear advantage for Dassault Aviation, which bagged a Euro 7.878 billion deal in 2016 to supply 36 Rafale fighters in the fly-away condition. The first set of four Rafales is set to land in India by April or May this year.
Rafale had initially won the mega IAF contract for 126 fighters but the deal could not go through because of a web of issues – primarily differences in cost between the French and HAL.
And then in a surprising move, the Modi government announced its intention to buy 36 Rafales in 2015.
There has been speculation for a while that India will be buying at least 36 more Rafale fighters once the earlier ordered jets begin getting inducted into the IAF.
There is a thinking in the government that 36 more Rafale along with the 83 LCA IA and Mark II versions equipped with modern and long-range missiles and systems will help in shoring up the IAF’s strength.
Incidentally, Gen Rawat had touched upon Rafale during his interaction with journalists Monday.
“Why do you think only 36 Rafales were bought,” Gen Rawat had said explaining why according to him it makes sense to buy in a staggered manner as it would reduce the cost and also staggered servicing.
On whether this meant that more Rafales could be bought, the CDS said everything depended on what the requirements are.
Defence sources said that additional Rafale would be cheaper than the one ordered in 2016.
This is primarily because a large component of the Euro 1,700 million paid for India Specific Enhancements will come down as the majority of the cost was for Research and Development, modification and certification.
Also, the cost of setting up base and training will also come down. India had paid for setting up two bases for just 36 aircraft. These bases can easily accommodate more aircraft.