To be prepared for war is one of the most effective means of preserving peace.
-George Washington
The Indian Air force requires 42 squadrons to conduct full spectrum of operations in a two front war scenario. Currently IAF has 32 squadrons which bring the numbers down to the lowest in this decade. The numbers are expected to go down further with the retirement of 14 squadrons by 2019-2020 which is mainly vintage MiG 21s and MiG 27s.
The defense procurement is a tedious and time-consuming process. It can be understood with the simple fact that steps currently being taken won’t yield results before 2032 (14 – 15 Years).
So, why is IAF down to 32 Squadrons?
There are three reasons behind it:
1.) Delay in LCA Program.
2.) Failure of MMRCA Deal.
3.) A K Antony
Yes!! A K Antony who was also known as “Saint Antony” and “Slow Death Antony” in defense circles because of his indecisive attitude. Former President Pranab Mukherjee resigned as Defence minister on 24 October 2006 and bad luck lasted for 7 years and 5 months till Arun Jaitley took over the office. It’s been fire fighting since then.
The steps taken by the Current Regime are:
1.) Increasing serviceability of primer fighter SU30 MKI with the JV in place.
2.) Upgrade of MIG 29 and Mirage 2000.
3.) 36 Rafale in order and discussion for additional fighters is in process.
4.) 123 LCA on order with 40 in MK 1 and 83 in MK1A versions.
5.) Strategic Partnership model – JAS 39 Gripen E or F16 Block 72
6.) AMCA Conceptualization and testing of the 3D model of 1:1 size in Hyderabad.
7.) Revival of FGFA Deal ( Ambiguity still remains )
Currently the deadliest operational fighter jets across the globe are F22 Raptor, F35 Lightening II, Euro Fighter Typhoon, Dassault Rafale and SU35. India initiated a deal with France to buy 36 Rafale off the shelf after the failure of the MMRCA Deal. To know more about Rafale – Please read our take on it!
The Dassault Rafale is again in news but this time it is because of Rahul Gandhi version 2.0 who said, “You ask me so many questions and I answer all of them… why don’t you question PM Modi on the Rafale deal?”
The Congress party has alleged that Modi Government caused an “insurmountable loss” of taxpayers’ money in signing the deal for 36 Rafale aircraft from France for Rs. 58,000 crores (7.8 billion Euros). The opposition party alleged that the cost of each aircraft is three times more than what the previous UPA government had negotiated with France in 2012.
France has categorically rejected allegations made by the Congress party and Reliance defense has threatened to sue them. To understand the Rafale deal Lets first understand the MMRCA tender and then analyze the same by comparing it with another big ticket procurement – SU30 MKI.
The Medium Multi-Role Combat Aircraft (MMRCA) competition, also known as the MRCA tender, was a competition to supply 126 multi-role combat aircraft to the Indian Air Force (IAF). The Defence Ministry has allocated ₹55,000 crore (US$8.6 billion) for the purchase of these aircraft, making it India’s single largest defence deal. The MRCA tender was floated with the idea of filling the gap between its future Light Combat Aircraft and its in-service Sukhoi Su-30MKI air superiority fighter.
The idea of bridging the gap between LCA and heavy Su30 were first mooted 30 years ago but nothing moved till 2016. On 31 January 2012 it was announced that Dassault Rafale won the competition due to its lower life-cycle cost. The deal had been reported to cost US$28–30 billion in 2014.
Why was the deal scrapped?
1.) There were big differences on total manpower costs between Dassault and Hindustan Aeronautics. HAL reportedly said that manpower costs would be nearly three times higher in India and, so it would cost more to build the Rafale jets here in India.
2.) The cost of a Rafale was ballooned to twice of the IAF’s primary workhorse, the Sukhoi 30 MKI.
3.) Dassault refused to take responsibility for the 108 HAL-manufactured Rafales, as it had reservations about the ability of HAL to accommodate the complex manufacturing and technology transfers of the aircraft.
Rafale Deal Vis a Vis Su30 MKI Deal
It is expected that IAF will be having 272+ Su 30 MKI by 2019 with a magical availability of 75%. At present it is 50 % and the long term spare agreement negotiated last year will make it 75%. Importance of additional 25% availability can be understood by the fact that it is as good as having 25% more units. On the same node let’s now understand the deal of 36 Rafale.
Congress claimed that the cost at which the fighter jets have been procured is three times of what was negotiated with UPA Government in 2012. But the question congress should answer first is what made them wait for 12 years to seal the deal? Cost of equipment increase every year and 12 years is a long time.
The answer lies in pricing and reaching an agreement and by the time Modi government could make a decision it was already too late and a minimum two squadrons were the need for the hour with upgrade of Mig 29 and Mirage 2000. HAL is already operating at its fullest potential and increasing the production rate of Tejas, but without export orders it is not a viable option economically. Thus “Strategic Partnership Model” was formulated and a 49% FDI was allowed. Following Joint ventures were established as per “Strategic Partnership Model” and this will indeed help in development of an eco-system for the defense manufacturing in India:
Tata – Lockheed Martin
Reliance – Dassault
Adani – SAAB
And many more like GSRE, Mahindra, L&T etc.
Let’s analyze the cost.
During MMRCA it was expected that the cost of the deal will be 7 billion (2007) and it was reported to cost US$28–30 billion in 2013-14. So the cost of the program was already four times. Yes!! Rafale deal was jeopardized because Mr AK Antony wanted to maintain his peaceful image. Before we analyse the current deal let’s look at other two deals:
1.) In 2016, France and Qatar completed the deal for 24 Dassault Rafale fighter jets. The fighter deal, which includes MBDA missiles, training for 36 pilots and some 100 mechanics, was earlier reported to be worth €6.3 billion (US $6.9 billion); however, it was announced Tuesday that the deal is now worth €6.7 billion (US $7.5 billion).
2.) In Feb 2016 Egypt signed €5.2 billion contract for the sale of 24 Rafale fighter jets which did not have Meteor Missiles in package.
With the current deal it is expected the first fighter will land in India by 2019 and all of them by 2022, following are the highlights:
1.) The basic cost of the aircraft is about €91 million or about Rs. 680 crore and little over Rs.1600 crore per aircraft for the whole deal. Defence sources across spectrum have observed that the agreement has many components, which are better than the original deal and the best part is the weapons package.
2.) The weapons package includes Meteor radar guided Beyond Visual Range (BVR) missile considered the best in the class with range of over 150 km and Scalp long range air to ground missiles. Defence officials been saying that the Meteor has a superior range than anything available in the region. “Our air superiority will be retained”.
3.) The deal includes the aircraft in fly-away condition, weapons, simulators, spares, maintenance, and Performance Based Logistics support for five years. “For five years we do not have to spend on maintenance,” sources said. Warranty is extendable by two years by factoring inflation and further by another five years upon negotiation. For the entire deal inflation has been capped at a maximum of 3.5 % or current rate whichever is lowest.
4.) France will also provide logistics and ground support. “There will be steep penalties if they don’t adhere to timelines,” sources said.
5.) The aircraft will be customised as per the requirements of the IAF which include Helmet Mounted Displays, radar warning receiver, infrared search and track among others.
6.) The deal also has provisions of modifying the two airfields for the Rafale operations.
7.) And the most important one : The Offset clause
a.) There is a 50 percent offset clause under which French industry will invest half the contract value back in the country which is expected to develop some expertise domestically in the aerospace sector. GTRE & Safran has already started working on the revival of the Kaveri gas turbine engine.
b.) Officials also said 74 percent of the 50 percent offset value should be exported from India. This is expected to result in Euro 3 billion over the next 7 years. There is also a six percent technology sharing component, which is being discussed with the Defence Research and Development Organisation (DRDO).
c.) As per the press conference of Defense minister Nirmala Sitharaman. The offset clause is not yet signed.
It is a comprehensive and Tailormade deal. I will wrap the article with a sincere advice and request to the congress party. Be it Bofors, Agusta Westland or any other defense scam the party that suffered in the end were “Indian Defense forces”. Cooking up in politics is part of the game but PLEASE keep the Forces out of it.