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New Delhi, Jan. 31: A flying French kiss is in the air.
The Indian Air Force (IAF) has decided French aircraft maker Dassault Aviation’s Rafale fighter jet is best suited for it.
The Rafale bid was less than the price quoted by four-nation European consortium EADS Cassidian’s Eurofighter Typhoon.
In a race that has lasted five years and tantalised not only India’s military establishment but also first-world countries and half-a-dozen of the globe’s largest companies, the sleek twin-engined Rafale with its ergonomic looks has beaten the Typhoon. Both aircraft were last year seen in action over Libya.
This will be India’s costliest defence contract totalling close to $20 billion (Rs 1 lakh crore) and is currently the single largest international military aircraft deal in the world, big enough to inject millions of euros into France.
The Financial Times reported that the deal has “the potential to reshape the European defence industry at a time companies are suffering from cutbacks in their traditional developed markets”.
Not to be faulted for passion, President Nicolas Sarkozy with Carla Bruni kept up a persistent and intensive diplomatic engagement with Prime Minister Manmohan Singh at both Rajpath and on the Champs Elysees. France’s refusal to impose sanctions on India after the 1998 nuclear tests and the Indian Air Force’s familiarity with the French-built Mirage 2000 aircraft would have shaped New Delhi’s choice.
Sarkozy, who lost no time in formally welcoming the developments although the final deal is yet to be sealed, is certain to flog the breakthrough as a coup, which should come in handy as he heads to elections. The conservative President is now trailing a socialist rival in opinion polls.
“The realisation of the Rafale project will illustrate the depth and scale of the strategic partnership between France and India,” the French embassy in New Delhi said.
For France and Rafale-maker Dassault Aviation, this is a huge boost because they have not been able to secure a single customer for the fighter plane apart from the Armee de ’air (the French air force).
The share price of Dassault Aviation Sarkozy is said to be close to the industrial group that also owns the pro-government Le Figaro newspaper jumped almost 20 per cent in Paris today after the Indian news broke.
Dassault Aviation said the company and its partners “are honoured and grateful to the government and the people of India
.”
For the (IAF), there was also the desperation to replace its ageing fleet of MiG 21 fighter aircraft with jets capable of matching up to Chinese and Pakistani capabilities and also the price.
The Rafale will not come cheap. The cost has not been announced by the companies or the government. But an approximate figure can be gauged by a Swiss competition in which the Rafale lost to the Swedish Gripen aircraft two months back. France had offered to sell 18 Rafale aircraft for $2.9 billion or $162 million (or about Rs 800 crore) each.
But the IAF would be buying 126 aircraft and the economies of scale would bring the price down a couple of notches. India proposes to buy the aircraft over 10 years 18 in ‘fly away’ condition over three years after the contract is signed and the rest to be assembled with Hindustan Aeronautics possibly at the defence firm’s Bangalore establishment.
When India sent out the request for proposals (or tender) to six firms in 2008, the cost of the deal was pegged at $10.4 billion (Rs 42,000 crore). The final figure could be close to twice that amount.
“Next fiscal,” defence minister A.K. Antony replied this morning, asked when a contract for the aircraft could be signed. Sources said later that the Rafale has emerged as “L1” jargon for lowest bidder.
The India representatives of the two competing companies had been informed. Price negotiations leading to the signing of a contract would begin in the next 10 days.
“It is a long process. The file has not come to my table,” Antony said. The final contract would come only after the approval of the Cabinet Committee on Security headed by the Prime Minister.
The IAF has the option of ordering an additional 63 aircraft but that will be at a re-negotiated price.
The Typhoon and the Rafale were shortlisted after 643-point technical and flight evaluation tests by the IAF through 2009 and 2010.
They edged out four other competitors the F-16 Super Viper (made by Lockheed Martin, US), the F/A-18 E/F Super Hornet (Boeing, US), Saab’s Gripen (Swedish) and the Russian MiG 35 to be shortlisted for the final leg.
The Eurofighter, built by companies from the UK, Germany, Italy and Spain has now been beaten by the Rafale for the Indian order.
Endre Lunde, a consultant with IHS Jane’s Defence Weekly, described the deal as a “major win for France, and a major loss for the UK”.
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