shree835
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Why is India buying only 36 of them?
There were several reasons. If you look at the evolution of the deal, there were several bottlenecks.
1. Interim Relief to the IAF - Depleting fast, the IAF raised the MMRCA requirement to fulfill its operational squadron strength of 39.5 which was revised to 42 looking at the Chinese air power in Tibet (see table below). Increasing the number of flyaway orders to 36 gives IAF the chance to maintain 1.5 operational squadrons, decreasing their dependence on HAL for rolling out the remaining lot. 2017 was the due date for decomissioning the oldest MiG-21 squadrons, hence it was imperative to induct and operationalize these squadrons.
2. No Guarantee on HAL-built Rafales - Dassault was adamant that they could not provide the guarantee for the HAL-built Rafales, which would be manufactured under license at Hindustan Aeronautics Limited (or the subcontractor) which was the main stalemate.
3. G2G Route - The Defence Procurement Panel (DPP) which was the nodal authority on contract negotiations was in a to-and-fro negotiation for the final price fix and finer details of the contract. When there was no headway, back channeling was pursued with Paris to enable a Government-to-Government(G2G) route for finalizing the deal on NaMo's visit to France last week. This put the talks on fast track, both Dassault and IAF seem to have not met their expectations although, as it finally signalled the death of the much long lived MMRCA.
4. Offset Regulations - Dassault initially won the MMRCA contract due to the mandatory offset regulations clause of 50%. Although HAL would be the lead integrator according to the original RFP, Dassault was planning a 50% JV with Reliance to setup a supply chain in India. Dassault's JV with Reliance been declared for manufacturing business jets but it seemed to be actually for setting up a secondary assembly line for Rafale in India to supply for future orders which makes business sense.
this deal for 36 flyaway Rafale is only a stopgap measure, and a decision the government had to make to give the IAF relief. Subsequent negotiations on meeting the remaining requirements for IAF squadron strength might mean depending on increasing the LCA fleet strength or the Sukhoi-30 MKI count.
Another possible reason, though remote, was the government's policy to divest HAL as a non-performing PSU in the near future. To open up private participation in defence manufacturing, the government may boost the deal to manufacture the remaining aircraft in India. This means either renegotiating with Dassault for Rafale or Cassidian/EADS for Eurofighter since time is critical. Chances of reopening the tender are scarce. Only time will tell, how the remaining 90 fighters are bought.
While the economics of the deal is vital, it plays role in shaping India's aerospace industry. In finalizing the deal for the remaining purchase, the government must strive to meet the IAF's requirement, with a long-term view of making India self reliant in defence production. The Rafale is just the first step in doing that.
There were several reasons. If you look at the evolution of the deal, there were several bottlenecks.
1. Interim Relief to the IAF - Depleting fast, the IAF raised the MMRCA requirement to fulfill its operational squadron strength of 39.5 which was revised to 42 looking at the Chinese air power in Tibet (see table below). Increasing the number of flyaway orders to 36 gives IAF the chance to maintain 1.5 operational squadrons, decreasing their dependence on HAL for rolling out the remaining lot. 2017 was the due date for decomissioning the oldest MiG-21 squadrons, hence it was imperative to induct and operationalize these squadrons.
2. No Guarantee on HAL-built Rafales - Dassault was adamant that they could not provide the guarantee for the HAL-built Rafales, which would be manufactured under license at Hindustan Aeronautics Limited (or the subcontractor) which was the main stalemate.
3. G2G Route - The Defence Procurement Panel (DPP) which was the nodal authority on contract negotiations was in a to-and-fro negotiation for the final price fix and finer details of the contract. When there was no headway, back channeling was pursued with Paris to enable a Government-to-Government(G2G) route for finalizing the deal on NaMo's visit to France last week. This put the talks on fast track, both Dassault and IAF seem to have not met their expectations although, as it finally signalled the death of the much long lived MMRCA.
4. Offset Regulations - Dassault initially won the MMRCA contract due to the mandatory offset regulations clause of 50%. Although HAL would be the lead integrator according to the original RFP, Dassault was planning a 50% JV with Reliance to setup a supply chain in India. Dassault's JV with Reliance been declared for manufacturing business jets but it seemed to be actually for setting up a secondary assembly line for Rafale in India to supply for future orders which makes business sense.
this deal for 36 flyaway Rafale is only a stopgap measure, and a decision the government had to make to give the IAF relief. Subsequent negotiations on meeting the remaining requirements for IAF squadron strength might mean depending on increasing the LCA fleet strength or the Sukhoi-30 MKI count.
Another possible reason, though remote, was the government's policy to divest HAL as a non-performing PSU in the near future. To open up private participation in defence manufacturing, the government may boost the deal to manufacture the remaining aircraft in India. This means either renegotiating with Dassault for Rafale or Cassidian/EADS for Eurofighter since time is critical. Chances of reopening the tender are scarce. Only time will tell, how the remaining 90 fighters are bought.
While the economics of the deal is vital, it plays role in shaping India's aerospace industry. In finalizing the deal for the remaining purchase, the government must strive to meet the IAF's requirement, with a long-term view of making India self reliant in defence production. The Rafale is just the first step in doing that.
