No clarity on Rafale deal

As the negotiations on the purchase of 126 Rafale fighter jets from France entered fourth year, Defence Minister Manohar Parrikar said he asked for a report from the contract negotiation committee on what are the hurdles blocking the Rafale deal.

“I have asked for a report from the contract negotiation committee (CNC) on the actual problems they have dealt with. I would not like to comment unless I receive the CNC report. Anything I say, will prejudice the CNC report,” the defence minister said.

Parikar said he asked the panel to submit the report by the end of February or early March, fuelling speculations that New Delhi and Paris may announce a positive statement on the protracted negotiations during Prime Minister Narendra Modi’s planned visit to France in April.

At the inaugural of Aero-India here, a Rafale fighter jet from the French Air Force took part in the fly past, enthralling the audience that included Prime Minister Narendra Modi and Parrikar.

Dassault Aviation’s refusal to accept the liability of the aircraft, to be produced at the Hindustan Aeronautics Limited’s assembly line, is one of the bottlenecks in the stalled negotiation. High aircraft cost is also a bone of contention.

On the eve of Bangalore air show, French authorities countered the defence ministry arguing that a 2012 document on the supply of Rafale fighter jets to New Delhi never committed the company to guarantee the aircraft manufactured in India.

“Dassault will not be responsible for the whole contract. It is a co-management setup,” said chief of French defence procurement agency Laurent Collet-Billon, who was clear that France will not assume full liability for the HAL-produced aircraft. “It cannot be a problem, because it was not in the RFP.” As per the 2007 Request for Proposal, the defence ministry’s plan was to buy 126 medium multi-role combat aircraft (MMRCA) at an estimated cost of Rs 42,000 crore. The first 18 aircraft will come in a ‘fly away’ condition while the remaining 108 will be manufactured at HAL under transfer of technology.
The Defence Procurement Procedure, 2006, was to be used as the guiding document.
Seven years down the line, the cost is sure to be increased. But exactly how much the hike would be remains unknown and is subject to the negotiations. 

When French defence minister Jean-Yves Le Drian met his Indian counterpart Manohar Parrikar in December, 2014 for bilateral talks, the two sides agreed to “resolve every differences in a fast track” manner.