India’s Rafale deal stalls again

Last month, it had seemed that India was on track to inking its long-awaited purchase of 36 Dassault Rafale multi-role fighters from France. At the time, the two sides had finally agreed upon a firm price, which was the main sticking point. In May, the Indian Ministry of Law and Justice began keeping a close eye on the Rafale deal, so as to avoid the prospect of corruption (as had occurred in a previous deal with the European helicopter manufacturer AgustaWestland). It is not clear where matters stand today.

Comment and Analysis

This off-the-shelf purchase of 36 fighters came in the ashes of the much-touted – but ill-fated – Medium Multi-Role Combat Aircraft (MMRCA) program. Under the MMRCA, the Indian Air Force (IAF) was to buy 126 new medium-weight multi-role fighters alongside the rights and capacity to produce the type in India.

High costs eventually pushed the Indian Ministry of Defence to pursue a much smaller purchase, and that too without the MMRCA’s technology transfer aspect. However, it seems not all of the Indian government is comfortable with the prospect of paying $9 billion U.S. for two fighter squadrons.

While one may feel the urge to chastise India over the issue, $9 billion is no small sum, and it is not as if India is short on options (which could greatly benefit from that funding). This is not to take away from the Rafale, which would certainly fit within India’s defence doctrine, but it seems the IAF will have to review its current perspective of the Rafale. It seems elements of the Indian government are asking the important question, “are the added costs worth the gains?”

A very valuable aspect of the Rafale deal was the offset clause; India’s private defence sector was to receive investment from France’s leading defence vendors, namely Thales Group and Safran Group. The entrance of these players would have helped the Indian defence industry in the area of avionics and propulsion development, respectively.

At the other end, one may think the Pakistan Air Force (PAF) is feeling some sense of ease about the Rafale deal. This is not entirely true. While the Rafale would have infused the IAF with exceedingly solid air warfare capabilities, it would not have altered the fundamental disparity between the IAF and PAF. For one thing, the PAF has to still deal with the challenge presented by the IAF’s large fleet of Sukhoi Su-30MKI Flankers; in time, those MKIs will also be upgraded, effectively to a standard comparable to the Su-35. Of course, averting added pressure does help.