Rafale Deal Cleared, to Be Signed On Friday
(Source: Press Trust of India; published Sep 21, 2016)
After long and complex negotiations, India should finally sign the contract to buy 36 Rafale fighters on Friday. By 2022, the Rafale and Sukhoi Su-30MKI will form the core of the Indian air force’s air combat capabilities as older types are retired. (Twitter photo)
Defence sources said that deal for the aircraft, the first fighter jet deal in 20 years, comes with a saving of nearly 750 million Euros than the UPA era one, which was scrapped by the Narendra Modi government, besides a 50 per cent offset clause.
This means business worth at least three billion Euros for Indian companies, both big and small, and generating hundreds of jobs in India through offsets.
The Rafale fighter jets, deliveries of which will start in 36 months and finished in 66 months from the date contract is inked, comes equipped with state-of-the-art missiles like Meteor and Scalp that will give the IAF a capability that had been sorely missing in its arsenal.
Sources said the government today formally cleared the Inter-Governmental Agreement to be signed on Friday in the presence of Le Drian who arrives tomorrow evening along with CEOs of Dassault Aviation, Thales and MBDA and top government officials.
The contract for the deal was already cleared by the Cabinet Committee on Security earlier. The price of the contract was fixed in May, sources said.
Sources said the "vanilla price" (just the 36 aircraft) is about 3.42 billion Euros. The armaments cost about 710 million Euros while Indian-specific changes, including integration of Israeli helmet mounted displays, will cost 1700 million Euros.
Rest of the cost include spare parts, maintenance among others.
Besides other features that make the Rafale a strategic weapon in the hands of the IAF is the Beyond Visual Range Meteor air-to-air missile with a range in excess of 150 km.
Its integration on the Rafale jets will mean the IAF can hit targets inside both Pakistan and across the northern and eastern borders while still staying within India's own territorial boundary.
Pakistan currently has only a BVR with 80 km range. During the Kargil war, India used a BVR of 50 km while Pakistan had none. With Meteor, the balance of power in the air space has again tilted in India's favour.
Scalp, a long-range air-to-ground cruise missile with a range in excess of 300 km also gives the IAF an edge over its adversaries.
The tough negotiations by the MoD-IAF team extracted many concessions and discounts from the French before arriving at a price that is almost 750 million Euros less than what was being quoted by the French side in January 2016.
This was when the commercial negotiations gathered pace, almost seven months after Prime Minister Narendra Modi announced India's intention to buy 36 Rafales off the shelf from France during his trip to Paris in April 2015.
(EDITOR’S NOTE: Assuming the contract is signed with no last-minute glitches, Indian Rafales will be delivered at a rate of two aircraft per month, with the first delivery scheduled for September 2019.
This new order will effectively double the current production rate of two aircraft per month, for France, Egypt and Qatar.)
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Cabinet Panel Clears Final Rafale Draft; Rs 59-crore deal for 36 fighter jets to be inked with France this week
(Source: Tribune News Service; published Sept 21, 2016)
Ajay Banerjee
The Cabinet Committee on Security (CCS) today cleared the final draft of the inter-governmental agreement to be signed with France.
The IAF has not procured any new fighter jets since the start of this century. The last one being the Sukhoi 30-MKI from Russia first ordered in mid-1990s and since then licence-produced in India by Hindustan Aeronautics Limited (HAL).
The two countries are set to sign a €7.878 billion (Rs 58.828 crore) contract with Dassault Aviation of France this week for these 36 Rafale jet fighters. This means around Rs 1634 crore for each plane that will add more power to the IAF's fleet - currently operating at its lowest force levels in a decade.
The first jet is to be delivered in 36 months (September 2019) and the entire lot will be delivered over the following 30 months.
The French company will make India-specific changes like the next-generation missiles such as Meteor and Scalp, which will add capability much beyond India's immediate adversaries. The Meteor, is a BVR (Beyond Visual Range) air-to-air missile with a range in excess of 150 km. It will allow the IAF to hit targets inside both Pakistan and Tibet from within its own territory. The Scalp is a long-range air-to-cruise missile with a range of 300 km.
The Ministry of Defence and the IAF team that negotiated the price has secured a concession of almost €722 million (Rs 5390 crore). In January, a day before French President François Hollande and Prime Minister Narendra Modi were to jointly issue a statement during the French President's visit to India, the French team had quoted a price of €8.6 billion.
The negotiations ended at a price of €7.898 billion, sources in the Ministry of Defence said. Of this, €3.42 billion is the cost of the bare planes, €1.8 billion of associate supplies for the infrastructure and support, €1.7 billion for India-specific changes, €710 million is the additional weapons package and €353 million is the cost of 'Performance-based Logistics Support'.
Under this logistics support, Dassault will ensure that at least 75 per cent of the fleet remains operational or air worthy at any given time under what is called the existing frontline fighter, the Sukhoi 30-MKI has only 60 per cent availability.
Other concessions include free training for nine IAF personnel, additional guarantee for 60 hours of usage of training aircraft for Indian pilots and six months of free weapons storage without charge.
Under the originally planned (and now scrapped) proposal to produce 126 planes in India, the first batch of 18 planes were to be manufactured in France and 108 were to be manufactured in India. France cited that cost of man hours (labour) needed in India to produce a plane was 2.7 times higher due to lack of automation. This alone would have meant additional Rs 150 crore per plane.
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