Rafale injects renewed vigour

MMRCA deal: Big relief for an air force afflicted with eternally slow modernisation process

The protracted negotiations for Medium Multirole Combat Aircraft (MMRCA) for the Indian Air Force (IAF) were finally concluded when India and France inked the Inter-Governmental Agreement on September 23, 2016, for the purchase of 36 Rafale fighter jets.

The Rafale is a 4.5-generation aircraft with exceptional agility and all-weather capability. Equipped with Active Electronically Scanned Array (AESA) radar, glass cockpit, advanced avionics, sensors and very potent Meteor BVR missiles, this multi-role aircraft has exceptional swing role capability in deep strike, air defence, interdiction and combat support roles. The aircraft has seen action in Afghanistan, Libya and Syria. The contract is a huge relief for the IAF, which is afflicted by a depleting force structure and an eternally slow modernisation process.

The first Rafale would enter service three years from now, but it would be almost six years before the two squadrons are complete as fully operational squadrons. While the Rafale would be the most modern aircraft in IAF’s inventory, just two squadrons (each IAF squadron has 18 aircraft) do not address its woes of ageing aircraft fleets. The IAF, which is currently at a low of 32 squadrons, would have to retire further 8 to 10 squadrons by 2022. Its replacements are hardly in sight.

For a variety of reasons, the IAF has been saddled with multiple types of aircraft. This has imposed huge logistics and supply chain problems resulting in unaffordable life cycle costs to sustain them. More importantly, it has put severe strain on the IAF to sustain required operational force levels in a threat environment that probably is the most adversarial for any country in the world. Ideally, the IAF’s force structure should consist of not more than three or four types of fighter aircraft, addressing its light, medium and heavy weight aircraft requirements.

The Light Combat Aircraft (LCA) should have replaced part of the MiG-21 fleet in short range tactical roles, while the Su-30MKI meets the heavier end of the air superiority and air dominance roles. The MMRCA, along with upgraded Jaguars and Mirage 2000s, in the mid-category, would have formed the bulk of the air force to meet major operational requirements. This would have ensured smooth phasing out of the MiG-21 Bis and Bisons, MiG-23s and MiG-27s with timely transitions. As it has turned out, delays in acquisitions and indigenous developments have had cascading effects on operational capability due to factors of obsolescence from retention of ageing fleets, poor reliability, lack of spares, and more importantly adverse impact on safety.

The LCA is still stuck in the Initial Operational Clearance (IOC) stage. The IAF’s first LCA squadron would take a minimum of two more years to complete its strength of 18 aircraft. The Chief of Air Staff Air Marshal Arup Raha was optimistic that LCA Mk1A would be ready by 2021, and the full force of 120 LCAs (40 Mk1 + 80 Mk1A) would be delivered by 2027. This could be a tall order, given the fact that high import dependency in terms of materials, critical components like the actuators, engine, radar, sensors etc., could create supply chain problems that could impact the production schedule. The IAF will have to factor the possibility of delayed deliveries in addition to shortfalls in operational performance.

The original tender for 126 MMRCA had two objectives: to meet the IAF’s operational necessity and to energise Indian defence aerospace industry through state of the art manufacturing technologies, the very objectives of the Make in India policy. These objectives were scuttled by two factors: India’s perennially slow and archaic acquisition process and the fact that the two shortlisted aircraft in the MMRCA selection happened to be the most expensive ones. These two factors pushed the MMRCA decision into a limbo, cost being probably the most important factor. The net result was scrapping of the 126 aircraft tender, and instead the decision to go for off-the-shelf buys through government-to-government deal for 36 aircraft.

Acquisition of two squadrons of Rafale aircraft, over the next six years, does not meet IAF’s requirements fully. The current shortfall of more than 90 aircraft would zoom to more than 200 by 2022. Assuming that 120 LCAs enter service by 2030, the IAF would still need to replace close to 400 ageing aircraft by 2030. Though the Indian side had negotiated hard and reduced nearly 600 million euros, the cost of 7.8 billion euros for 36 aircraft is relatively expensive. However, 50% offset that comes with it could be a huge benefit to the Indian industry if exploited intelligently. The original 126 aircraft tender, budgeted at $10.5 billion in 2004, was not much off the mark. The Rafale unit prices as paid for by the French Air Force and the French Navy are 51.8 million euros for Rafale C and 56.6 million euros, respectively.

Price issues

The programme cost, including design, development and production, for a production run of 286 aircraft is 43.6 billion euros. The unit programme cost of the Rafale works out to 154.9 million euros.

The basic unit cost of the Indian Rafale is 94.5 million euros – total cost 3,402 million euros. India-specific design changes costs a whopping 1,700 million euros. This pushes the basic unit cost to 141.72 million euros. If India were to place further orders in future, the basic cost would be pegged at this level plus escalation. It is clear that India is paying a basic unit cost close to the programme cost – also true for Egypt and Qatar. The remaining part of the 7.8 billion euros includes spares, maintenance and weapons package, thus pushing the overall unit cost to 218 million euros.

The fact that this is an off the shelf buy at a significantly high cost, pretty much rules out any future possibility of further orders. Future orders in small batches do not provide any options for manufacture, besides shooting up the cost. Such a procurement would also defeat the very objective of Make in India. The renewed interest amongst the MMRCA participants to address the remaining large requirements of the IAF through Make in India programme will stand a chance only if they meet primary considerations of cost, technology and rapid production in India. This would be a huge chance for the Indian industry, provided the government decides quickly. Therein lies some hope for the IAF to address its depleting force structure.

(The writer is a veteran fighter pilot with 39 years of active service. He was also the Deputy Chief of Integrated Defence Staff responsible for policy, plans and force structure development at the Headquarters Integrated Defence Staff in the Ministry of Defence)