Rafale Slipstream: India not to Budge on Lowering Jets’ Price

[dadeechi]

I agree that we were in a very bad position 4 years ago,but thanks to the Egyptians,this has changed. Negociations are in final stages to sell 60 aircrafts to the UAE !


I thought India was rich ?
No,seriously,how is Parikar going to justify an aircraft at 270 million/per piece at the parliament ?

Very well said. No one in India can justify the $270 million/per piece price tag.

BJP government is trying to pull wool over the eyes of the Indian public.

The original deal was around $8 Billion for 36 jets. They inflated the price to $13.25 Billion and now projecting that there is hard bargaining going on behind the scene.

I am actually surprised why France has not yet pulled out of this deal in spite of multiple deals from the wealthy Arabs.

I wonder who is pocketing the increased $4 Billion dollars (assuming 10% discount as the final deal).

France offers 25% discount to India on purchase of 36 Rafale jets - The Economic Times

 

[randomradio]

Very well said. No one in India can justify the $270 million/per piece price tag.

BJP government is trying to pull wool over the eyes of the Indian public.

The original deal was around $8 Billion for 36 jets. They inflated the price to $13.25 Billion and now projecting that there is hard bargaining going on behind the scene.

I am actually surprised why France has not yet pulled out of this deal in spite of multiple deals from the wealthy Arabs.

I wonder who is pocketing the increased $4 Billion dollars (assuming 10% discount as the final deal).

France offers 25% discount to India on purchase of 36 Rafale jets - The Economic Times

Wow. Dude. I would suggest asking questions or doing some legwork instead of just resorting to blanket statements that are wrong.

The jet itself costs less than $85M for India. The 270M price tag, includes a lot of other equipment, including $2B worth of customization, 10 years of spares and 40 years of maintenance, not to mention weapons, training and base infrastructure.

If you want to compare it to the MKI, just the unit price of $65M and 10 years of spares at $3M/year makes the the cost more than $95M. The MKI will get progressively more expensive as time goes by. The last time we got the MKI overhauled, it cost us $18M for a single jet, and will need 2 more of those, and that's separate from the 95M cost. The Rafale doesn't need overhaul.

And the Rafale deal comes with 50% offsets, while the MKI has no offsets. That means the '$270M deal' is actually $135M for India.

If you only consider MKI's unit cost, spares cost for 40 years and 3 overhaul costs, we need to spend 65M+120M+54M = $239M at current rate of expenditure. And this doesn't even include costs for training, infrastructure, weapons and regular maintenance for 40 years. The infrastructure, maintenance and weapons alone go into billions of dollars for the fleet.

In the MMRCA deal, the cost of production of a Rafale, followed by 40 years of operation, with training and base infrastructure, came to $300M per aircraft. About $200M in the new deal. It's considerably lesser than the MKI. And the MKI is yet to be upgraded.

 

[dadeechi]

Wow. Dude. I would suggest asking questions or doing some legwork instead of just resorting to blanket statements that are wrong.

The jet itself costs less than $85M for India. The 270M price tag, includes a lot of other equipment, including $2B worth of customization, 10 years of spares and 40 years of maintenance, not to mention weapons, training and base infrastructure.

If you want to compare it to the MKI, just the unit price of $65M and 10 years of spares at $3M/year makes the the cost more than $95M. The MKI will get progressively more expensive as time goes by. The last time we got the MKI overhauled, it cost us $18M for a single jet, and will need 2 more of those, and that's separate from the 95M cost. The Rafale doesn't need overhaul.

And the Rafale deal comes with 50% offsets, while the MKI has no offsets. That means the '$270M deal' is actually $135M for India.

If you only consider MKI's unit cost, spares cost for 40 years and 3 overhaul costs, we need to spend 65M+120M+54M = $239M at current rate of expenditure. And this doesn't even include costs for training, infrastructure, weapons and regular maintenance for 40 years. The infrastructure, maintenance and weapons alone go into billions of dollars for the fleet.

In the MMRCA deal, the cost of production of a Rafale, followed by 40 years of operation, with training and base infrastructure, came to $300M per aircraft. About $200M in the new deal. It's considerably lesser than the MKI. And the MKI is yet to be upgraded.

Easy my friend.

$270 million/per piece price tag was quoted by the respected member @Vauban to whom I was responding.

I posted below article in my response on how Indian (BJP/Modi) government has artificially jacked up the price from $8 Billion (Apr/May-2015) to $13.25 Billion (FEB-2016).

The overall cost is not expected to cross $8 billion for the entire 36-aircraft fleet, French sources said. MMRCA stands for medium multi-role combat aircraft.

The price per aircraft is not just the acquisition cost of the platform, but also includes maintenance facilities, training of pilots and technicians, armaments and spares. In comparison, Dassault signed a deal with Qatar on Monday to sell 24 Rafale fighters for $7 billion, which would put the per-aircraft cost at just over $290 million. India is set to get a better deal because of the larger number being ordered. It may be noted that the rival Eurofighter that was also in contention for the c ..

Read more at:
http://economictimes.indiatimes.com/articleshow/47168431.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

And the Rafale deal comes with 50% offsets, while the MKI has no offsets. That means the '$270M deal' is actually $135M for India.

.

Why would 50 % offset mean 50% cost to India?

What if 50% offsets are invested in non value adding programs or worse in competing programs that would kill indigenous MIC

 

[randomradio]

Easy my friend.

$270 million/per piece price tag was quoted by the respected member @Vauban to whom I was responding.

I posted below article in my response on how Indian (BJP/Modi) government has artificially jacked up the price from $8 Billion (Apr/May-2015) to $13.25 Billion (FEB-20).

The overall cost is not expected to cross $8 billion for the entire 36-aircraft fleet, French sources said. MMRCA stands for medium multi-role combat aircraft.

The price per aircraft is not just the acquisition cost of the platform, but also includes maintenance facilities, training of pilots and technicians, armaments and spares. In comparison, Dassault signed a deal with Qatar on Monday to sell 24 Rafale fighters for $7 billion, which would put the per-aircraft cost at just over $290 million. India is set to get a better deal because of the larger number being ordered. It may be noted that the rival Eurofighter that was also in contention for the c ..

Read more at:
http://economictimes.indiatimes.com/articleshow/47168431.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Here are the costs for the Rafale.

Unit flyaway = 2.5B Euros
Spares and services for 10 years = 1B Euro
For 1 base = 1.4B Euro
Weapons = 1B Euro
Customization = 2B Euro
Total = 7.9B Euro

Earlier, IAF wanted 2 bases. That was an additional 1.4B Euro. Cost was 9.3B Euro for the full deal. So the MoD decided to remove that cost to bring it down to less than 8B Euro or $8.8B.

Now they are tweaking the maintenance and customization costs to come to a better price. In the $7-8B range. After that, half the money will be pumped back into the economy via some tech for LCA and a brand new production line for Rafale.

What if 50% offsets are invested in non value adding programs or worse in competing programs that would kill indigenous MIC

Answered above. The Rafale deal will improve Indian MIC. In the future, after Rafale production is over, companies like Reliance and Tata can build AMCA and FGFA.

We are building a massive aerospace sector in India. We want at least 200,000 people working in the aerospace sector in the next 10 years. That's why we are going for an additional MMRCA deal, maybe two if we can.

Why would 50 % offset mean 50% cost to India?

About $8B will leave India. $4B will come back to India as investment.

 

[dadeechi]

Here are the costs for the Rafale.

Unit flyaway = 2.5B Euros
Spares and services for 10 years = 1B Euro
For 1 base = 1.4B Euro
Weapons = 1B Euro
Customization = 2B Euro
Total = 7.9B Euro

Earlier, IAF wanted 2 bases. That was an additional 1.4B Euro. Cost was 9.3B Euro for the full deal. So the MoD decided to remove that cost to bring it down to less than 8B Euro or $8.8B.

Now they are tweaking the maintenance and customization costs to come to a better price. In the $7-8B range. After that, half the money will be pumped back into the economy via some tech for LCA and a brand new production line for Rafale.

If you are saying that the quoted figure of 12 billion euros in the OP is incorrect then there is nothing to discuss. It's the same deal as last year. No hikes No discounts. So what is stopping closure of the deal? Why does Parikkar need to issue a statement fooling the Indian public on ongoing price negotiations?

 

[randomradio]

If you are saying that the quoted figure of 12 billion euros in the OP is incorrect then there is nothing to discuss. It's the same deal as last year. No hikes No discounts. So what is stopping closure of the deal? Why does Parikkar need to issue a statement fooling the Indian public on ongoing price negotiations?

The deal has almost reached closing stage. They are discussing customization costs and maintenance costs now. Check post 77 and 79. I've clarified it in post 6 also, but you missed it I suppose.

 

[dadeechi]

Answered above. The Rafale deal will improve Indian MIC. In the future, after Rafale production is over, companies like Reliance and Tata can build AMCA and FGFA.

We are building a massive aerospace sector in India. We want at least 200,000 people working in the aerospace sector in the next 10 years. That's why we are going for an additional MMRCA deal, maybe two if we can.



About $8B will leave India. $4B will come back to India as investment.

Yes. I understand that but that $4 Billion would be French investment in India. It's not like India is going pay only 50% of the cost. It would only alleviate the issue of Dollars leaving the country.

Will they invest in Engine/scramjet, Radar, Avionics , Seekers? So far most of the offsets have been in no value adding areas.

 

[randomradio]

Yes. I understand that but that $4 Billion would be French investment in India. It's not like India is going pay only 50% of the cost. It would only alleviate the issue of Dollars leaving the country.

The Middle East countries don't have this advantage. Most deals that have offsets come at an additional cost, so the cost of the offsets is amortized in the cost of the deal. The Rafale deal doesn't.

The French will eventually give India ToT and even export contracts.

Will they invest in Engine/scramjet, Radar, Avionics , Seekers? So far most of the offsets have been in no value adding areas.

We have other deals for that.

Dassault and SAFRAN are investing in production areas of the Indian MIC. It doesn't exist here. Some companies will start from scratch like Reliance, and some companies will benefit in other areas which they can use in our indigenous programs, like BEL. All these are of very high value.

LCA will be getting new landing carriage tech. That's been a big problem area for ADA.

 

[dadeechi]

The Middle East countries don't have this advantage. Most deals that have offsets come at an additional cost, so the cost of the offsets is amortized in the cost of the deal. The Rafale deal doesn't.

The French will eventually give India ToT and even export contracts.



We have other deals for that.

Dassault and SAFRAN are investing in production areas of the Indian MIC. It doesn't exist here. Some companies will start from scratch like Reliance, and some companies will benefit in other areas which they can use in our indigenous programs, like BEL. All these are of very high value.

LCA will be getting new landing carriage tech. That's been a big problem area for ADA.

Last I read SAFRAN was pulling out of India

France's Safran Shelves Plan for Rafale Fighter Project in India - Bloomberg Business

The Middle East countries don't have this advantage. Most deals that have offsets come at an additional cost, so the cost of the offsets is amortized in the cost of the deal. The Rafale deal doesn't.

The French will eventually give India ToT and even export contracts.



We have other deals for that.

Dassault and SAFRAN are investing in production areas of the Indian MIC. It doesn't exist here. Some companies will start from scratch like Reliance, and some companies will benefit in other areas which they can use in our indigenous programs, like BEL. All these are of very high value.

LCA will be getting new landing carriage tech. That's been a big problem area for ADA.

Do you know if the below was cleared by the French Government?

France to supply cutting-edge internal guidance technology for BrahMos : North, News - India Today

 

[randomradio]

Last I read SAFRAN was pulling out of India

France's Safran Shelves Plan for Rafale Fighter Project in India - Bloomberg Business

Naturally. HAL was no longer a contender, so SAFRAN withdrew. Now a new manufacturer will be chosen from the private sector.

Do you know if the below was cleared by the French Government?

France to supply cutting-edge internal guidance technology for BrahMos : North, News - India Today

It's GPS tech, doesn't need any major clearance. Russia and India don't make good military grade GPS tech, so we rely on the French for that. The Su-30MKI has the Totem-3000. Of course, I have no idea if it has been done already.

 

[Vergennes]

Actually IF the French had half a brain, they would pro-actively offer Saudi, Qatar, & UAE to buy 300+ jets, over 10 years, with local assembly & MRO.

The relations between France and the GCC have never been so better than right now,we have chances indeed.

(One already bought the Rafale and another is about to do the same. )

At the same time they could tell India to take their order for 36 jets and................

I'm very sure that they will not go further than 54 Rafale,let alone 200 or 300...

 

[Archie]

Why will a single Rafale base cost 1.4 Billion USD

Su3MKI is deployed across 6 bases in India with 2 more bases being readied to receive the remaining 3 sqds

India paid 12 Billion USD for 272 Su30MKI

Their is no way in hell, we will pay 12 Billion USD for 36 Rafales

 

[dadeechi]

Why will a single Rafale base cost 1.4 Billion USD

Su3MKI is deployed across 6 bases in India with 2 more bases being readied to receive the remaining 3 sqds

India paid 12 Billion USD for 272 Su30MKI

Their is no way in hell, we will pay 12 Billion USD for 36 Rafales

Note that the OP says 12 Billion EUROs which means $13.25 Billion

 

[randomradio]

The relations between France and the GCC have never been so better than right now,we have chances indeed.

(One already bought the Rafale and another is about to do the same. )



I'm very sure that they will not go further than 54 Rafale,let alone 200 or 300...

I don't understand you and @Taygibay. What's up with the hate for India?

You guys don't believe Trappier, Hollande, Dassault's ex-number 4 Picdel and a solid French MoD source CNL? And even the IAF Chief and Indian MoD have confirmed the Make in India for Rafale is happening.

Hell, even PAF Air Marshal Shaheed Latif said the IAF is getting all 126 Rafales in a news program.

MoD source: I am very relax . Especially because I know facts about the coming contracts and they make me happy and confident for the India/France relationship in the coming decades.

It's been confirmed that Dassault is going to built a production line in India as offsets. 100% confirmed. Trappier also says 90 Rafales are to be made in India as the first tranche. Please look at the video I posted above, Trappier's interview. Geez, all of this is of major benefit to your own country and your own air force. The entire development cycle for Rafale has been brought forward.

You can ask @halloweene if you don't trust all the above people.

If you still don't trust all these people, then...

X posting CNL's post:
Several IN pilot officers will soon come to BAN Landivisiau, France. And discussions about Rafale M also concern cooperation on a bigger equipment.

Dassault plans to build in India a new model of Falcon, less expensive than other existing models.

 

[Taygibay]

What's up with the hate for India?

First entirely logic thing I heard from you for a while, man! Kudos!
If you think I hate India ( and I trust the same applies to Vauban ),
you indeed don't understand me!

But above & after that line it goes your usual South. Taking once more
your point of view as universal, you missed that I said Rafale numbers
for India would be 90 MINIMUM a few weeks ago ...before you joined PDF!!!
You just took it upon yourself to refuse to hear me then and tagged me
in here as linked to someone else's declaration, that's all! No biggie!
But no need to repeat it either, ideally?

It's not that important anyhow; in another lifetime maybe.
As for the present one, don't worry ( about it ), be happy!
Tay.