New Delhi (The Star/ANN) - The Indian defence ministry¿s decision to buy fighter aircraft from France has left Britain, Germany, Italy and Spain dejected.
The recent decision to buy 126 medium multi-role combat aircraft from France¿s Dassault Rafale at a total cost of US$12 billion could be a game-changer for the Indian defence industries.
Some $6 billion worth of contracts could flow from Dassault to Indian companies over the next eight years during which the full complement of 126 aircraft are to be supplied to the Indian Air Force.
Though the record of such offsets is murky, with foreign defence suppliers often failing to keep commitments ¿ and the Indian authorities failing to pin them down ¿ it is hoped that things would be drastically different this time.
For one, the desperation of the French Dassault and its two suppliers Thales and Safran to bag the India contract would oblige them to honour the terms of agreement.
Two, India as the third largest economy in Asia is no longer diffident in enforcing its contractual rights.
However, the keenly awaited deal for the fighter aircraft made headlines for a number of other reasons as well, not least for the selection of the French Rafale in preference to the four-nation European consortium¿s Typhoon.
After nearly a decade of a multi-tiered search and selection process, when the Defence Ministry finally gave the nod to the French last month, it left the four-nation consortium of Britain, Germany, Italy and Spain completely dejected.
They had high hopes for the Eurofighter Typhoon but reportedly got beaten on price. Apparently, the Rafale was 10 per cent cheaper, that is, about $5 million per aircraft.
In the backdrop of the Swedish Bofors Howitzer scandal which had led to the fall of the Rajiv Gandhi government in the late 1980s, price-sensitivity was a key factor.
Defence Minister A. K. Antony had a reputation to protect as a stickler for rules. Therefore, it came as no surprise when the lowest bidder clinched what is easily the biggest ever defence deal.
In fact, the British found it hard to hide their disappointment with a section of their media and the political class blaming Prime Minister David Cameron for not doing enough to persuade his Indian counterpart to consider the Eurofighter offer favourably.
It was pointed out that French President Nicolas Sarkozy had personally lobbied hard when he visited India in end-2010 and earlier when the two met at international summits. Also, the French Embassy in New Delhi was supposed to have worked tirelessly to win the Rafale deal.
Lobbying, however, could not have been the clincher. IAF tested each competing aircraft on as many as 600 different parameters. A few months earlier, it had eliminated at least four bidders, including two from the US.
The American Lockheed Martin had offered F16IN Super Viper and Boeing F/A-16 Super Hornet. Russian MiG 35 too was in the race but was eliminated in early 2011.
In April last year, only two were left in the race ¿ the Rafale and the Typhoon.
Interestingly, the Indian media noted that the elimination of the American bids was followed by compensatory orders for defence equipment by the Government in order to keep Washington in good humor.
However, even after plaintive cries of denial were heard in London and Bonn, the Indian authorities had yet to make any placatory moves towards them.
The British would, however, hope that the painstaking price negotiations between Dassault and the Indian Defence Ministry before the agreement is finally signed and sealed might create an opening for them to smuggle in.
It is not unknown for price negotiations to end in a complete rupture, though it is unlikely that the French manufacturer would countenance a situation which leads to a forfeiture of the opportunity to bag India¿s biggest defence deal.
Notably, the British-led consortium did offer to reduce the price once the Dassault bid emerged the lowest but this was unacceptable to the Indian authorities.
After all, this wasn¿t the first time the Indians were doing business with the French in the defence sector. Since the mid-1980s, the Indian Air Force has relied on the French Mirage 2000s to police its airspace. These were the early version of the multi-role fighter aircraft and came in handy when India successfully fought Pakistan in the Kargil heights in 1999.
With the Russian MiG-21s going obsolete, India needed an advance multi-role combat aircraft. Thus, it was in early 2000 that the Air Force put in a demand for acquiring advanced fighter jets.
More than a decade after the IAF first raised the demand, the decision-making process has now reached what can only be called the penultimate stage before the new fighters can join the IAF fleet. This underlines the painfully cumbersome and slow process that informs all such equipment acquisitions by the defence forces.
Should the Dassault deal finally go through, it is unlikely that the first of the Rafale squadron would join the IAF before the end of 2015. Initially, these would be completely built in France, though the later squadrons would be assembled by Hindustan Aeronautical Company, a government undertaking, in close collaboration with Dassault.
Meanwhile, the remarkable thing about the biggest defence deal was that thus far there has been no controversy about extraneous factors dictating the decision.
Admittedly, in some quarters there was talk that closer cooperation in the sphere of nuclear energy could be a factor in going in for the Rafale.
But far more valid concern has been voiced in well-informed defence quarters that by going in for the Rafale, India had missed an opportunity to induct the latest, fifth generation fighters in its air force. Neither the Rafale nor the rival Typhoon qualified as full fifth generation aircraft.
The American aircraft, even though not the latest F-22 Raptor, were ahead on most parameters but did not make the cut, according to some of these defence experts.
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