Analysis: India’s Withdrawal from the FGFA Program

On 20 April 2018, IHS Jane’s reported that the Indian Air Force (IAF) had formally ended its involvement in the Fifth Generation Fighter Aircraft (FGFA) it had started with Russia in 2007.[1] Official confirmation has yet to come from New Delhi, but reports of the IAF’s discontent with several key aspects of the Sukhoi T-50/Su-57 PAK-FA – i.e. the platform from which the FGFA was to be derived – had trickled through the past year. The IAF’s concerns include dissatisfaction over the PAK-FA’s radar cross-section (RCS)-reduction work (i.e. stealth) and the quality of its onboard electronics, most notably the radar.[2]

This is a significant event in that it alters the long-term value of bilateral Indian-Russian defence relations. Granted, there are still numerous big-ticket programs poised to reach fruition, not least a joint-production program involving the Kamov Ka-226T and continued cooperation on T-90-series main battle tanks (MBT). The continuation of the IAF’s Su-30MKI program – i.e. ongoing support and potentially upgrades – is also a potential area of interest between Moscow and New Delhi.

However, fighter aircraft are arguably the biggest-ticket items in that they not only have to be bought in sizable numbers, but will amount to several hundred million dollars – each – in acquisition and long-term support costs. By closing the door on the FGFA the IAF has effectively closed the door on Russia securing a new wave of fighter orders – and in turn, a leading revenue-generator for Moscow – in India.

India’s Problems with the FGFA

India signed onto the FGFA in 2007. Pegged as the “largest joint project” in the history of Russia and India’s defence relations, the FGFA’s development alone was to reach a cost of $8 to $10 billion US. In 2010, both India and Russia signed a $295 m preliminary design contract. This was joined in 2013 with a contract to  formally develop the FGFA as a variant of the PAK-FA – i.e. tailor the PAK-FA to the requirements of the IAF.[3] It was thought that the IAF would gradually supplant its Su-30MKIs with the FGFA, benefitting from both a deep level of transfer-of-technology (ToT) and economies-of-scale through leveraging the fighter requirements of both countries. In totality, the FGFA would have arguably dwarfed all prior Indo-Russian defence programs in its scale and cumulative economic value.

However, the IAF had repeatedly voiced concerns over what it perceived as deficiencies in the PAK-FA’s core design (which would have impacted the FGFA). These issues revolved around insufficient work done to reducing the PAK-FA’s RCS, a less-than-adequate onboard electronics suite and a call for new turbofan engines. Overall, the IAF reportedly required as many as 50 specific changes to the PAK-FA to align it with its expectations for the FGFA. These requirements included 360-degree radar coverage, engines capable of providing supercruising (i.e. fly at supersonic speed without afterburning the engines) and reducing the airframe’s RCS (especially of the side and rear of the airframe).[4]

However, the IAF was evidently weary of the progress United Aircraft Corporation’s (UAC) Sukhoi bureau was claiming with the project. Instead, a combination of less-than-adequate subsystems (being tested) along with Moscow’s tentativeness over its own procurement commitments (currently committing to 12 early production models) apparently tested the IAF enough to have it pivot away from the FGFA.[5]

Besides the technical issues, New Delhi was also doubting whether it would acquire sufficient ToT to fully produce and support the FGFA independently. Russia would not fully commit.[6] New Delhi basically wanted to avoid a repeat of the Su-30MKI; HAL assembled the aircraft, but remained unable to manufacture its spare parts or undertake maintenance, repair and overhaul (MRO) without Russian inputs.[7] Besides failing to propel the Indian aviation industry (as originally hoped), it also compromised the IAF by keeping its Su-30MKI fleet’s serviceability rate to around 50% in 2014.[8]

India’s Goals: Parity, Development & Economic Gain

By reading into India’s apparent criticisms of the PAK-FA, one can also identify its long-term objectives: First, to maintain technological parity with major powers – not least China, but as a general principle vis-à-vis the U.S. and Europe. Second, to develop its domestic aviation industry in all spaces – i.e. being at the center of major development and manufacturing aerostructures, electronics and engines. Third, to accrue significant long-term economic gain by flipping its domestic arms procurement into technology exports.

The first element – i.e. technology – is self-evident in the IAF’s requirements. Having secured the Dassault Rafale and poised to either add more – or another comparable fighter such as the Boeing F/A-18E/F Super Hornet – the IAF should understand the necessary leap between an existing ‘4.5’-generation jet and a genuine ‘5^th’-generation design. The PAK-FA reflected the former (i.e. ‘4.5’ generation) instead of pushing to the latter (i.e. ‘5^th’-generation) – i.e. offer significant RCS reduction, use new technology advancements (e.g. innovate on composite materials, gallium nitride-based transceivers, artificial intelligence, etc) and create new synergies (e.g. interoperability between manned and unmanned aircraft).

Granted, one might argue that the PAK-FA is sufficient to handle China’s existing crop of next-generation fighters – i.e. J-20 and FC-31. However, unlike Russia, China has a deeper research and development (R&D) effort – along with the requisite fiscal strength and scale to sustain it – to advance its fighter development work. India will face a continually rising threat element from China, one that could see China emulate the leading technology trends it can observe in the US and Western Europe. It would be folly to assume that China will simply stop its efforts at the J-20 and FC-31; rather, one should expect new fighters, eventually.

New Delhi also views itself as a true partner of the US and a significant power in its own right; there is no reason for its forces to operate less capable weapon systems than leading US allies, especially Japan, South Korea and Australia. Thus, ‘parity as principle’ is likely a stance that New Delhi will look stick to moving forward as it examines prospective development partners for its fighter requirements. In addition to giving it deep technology access, these partners will also need to honour India’s economic expectations.

At its core, the Indian Ministry of Defence’s (MoD) Strategic Partnership model looks to channel most of New Delhi’s arms expenditure through India – i.e. utilize Indian labour and manufacturing. It is a two-fold effort designed to ensure that foreign/hard-currency otherwise spent on arms imports stay in India while also – through shared-equity partnerships between foreign and domestic companies – ensuring that some of the profit also remains within India (and enable for future private sector investment in the economy).

That activity is expected to result in genuine technological development in India’s defence industry, not least in terms of manufacturing sensitive technology. For example, under the IAF’s Rafale purchase, Thales is reportedly committed to enabling India to freely integrate and manufacture the onboard electronics.[9] Besides supporting India’s technological growth, it also enables India to expand its presence as a supplier – especially as a supply-chain partner to the likes of Dassault (and/or Boeing, Lockheed Martin, etc) – and have its industry export manufactured goods and other services to third-party customers.

India’s Next Steps

Based on the criteria discussed earlier – i.e. technological parity, deep ToT and industrial workshare – the alternative to the FGFA will likely emerge from the West. However, in contrast to the discourse centering on a potential IAF purchase of the Lockheed Martin F-35 Lightning II, it might be more prudent to examine the Dassault-Airbus Future Combat Air System (FCAS) as India’s next step.

On 25 April 2018, Dassault and Airbus (i.e. France and Germany) officially agreed to jointly develop and produce Western Europe’s next-generation fighter platform – i.e. the FCAS.[10] The FCAS is slated to replace the Eurofighter Typhoon and Rafale by 2035-2040, though demonstrators are expected to emerge from 2025.[11] Currently, the FCAS program is strictly limited to solely France and Germany, but Paris – citing the need to guarantee economies-of-scale and long-term feasibility – is looking to open the door to exports. In fact, the Minister of the French Armed Forces, Florence Parly, stated: “…without having the possibility of selling the equipment to other countries, the economic model for this cooperation will not be viable.”[12]

Remarkably, the FCAS is well-positioned to takeover the FGFA. First, the FCAS intends to substantially improve upon the capabilities of the Typhoon and Rafale, thus justifying the expense of the program over existing solutions. Second, Dassault can leverage India’s potential scale to entice German approval, thus ensuring that a decline in orders in Europe do not make the FCAS unviable from a procurement standpoint. Third, Dassault can offer India the FCAS as a carrot to secure the current bid for 110 new multi-role fighters with the Rafale. Fourth, Dassault can even extend the FCAS to the Indian Navy – again, incentivizing India to procure additional Rafales while also guaranteeing scale for the naval FCAS variant. Fifth, leverage New Delhi’s fiscal strength to guard the program from potential fiscal lapses in Europe. Sixth, access to India’s scale and industry could make the FCAS more competitive in terms of cost, thus opening access to third-party markets in the Middle East and East Asia.

Ultimately, the core issue – be it with the FCAS, F-35 or any other solution – would be to see how well the OEM can balance controlled technology access to India. Between Boeing or Lockheed Martin and Dassault, it is likely that the conversation on this issue will be easier with Dassault (as the US has a record of guarding the transfer of its sensitive technology more vigorously, even with close allies such as Japan). Besides the issue of technology transfer, the FCAS Consortium will also need to find an equitable balance that ensures that the workshare interests of all partners are respected. New Delhi – with its cash and scale – will look to draw substantive concessions. Thus, the FCAS Consortium would need to determine if it is feasible to have India as a traditional partner or to involve India through an alternative approach.

Overall, walking away from the FGFA has ‘re-set’ India’s next-generation fighter procurement, at least in terms of an off-the-shelf and/or co-developed design to complement the HAL Advanced Medium Combat Aircraft (AMCA). Be it the FCAS, F-35 or some other program, the process of negotiating with prospective partners and then chartering an actual design and development roadmap will require time. In effect, the next-generation fighter element could be a distant factor; instead, the emphasis is now on building a sizable ‘4.5’-generation fleet that replaces legacy aircraft while setting the stage for FGFA development by securing New Delhi’s access to a viable program with the requisite ToT and workshare expectations.

[1] Rahul Bedi & Reuben F. Johnson. “India withdraws from FGFA project, leaving Russia to go it alone”. IHS Jane’s Defence Weekly. 20 April 2018. URL: http://www.janes.com/article/79457/india-withdraws-from-fgfa-project-leaving-russia-to-go-it-alone (Last Accessed: 22 April 2018).

[2] Ibid.

[3] Press Release. “The contract to develop a sketch and technical project of the Russian-Indian 5th -generation fighter was completed”. Sukhoi. 10 April 2013. URL: https://web.archive.org/web/20130503002346/http://www.sukhoi.org/eng/news/company/?id=5125 (Last Accessed: 22 April 2018).

[4] Sebastien Roblin. “RIP: Russia and India Had Big Plans to Build a Deadly Stealth Fighter. What Happened?”. The National Interest. 27 April 2018. URL: http://nationalinterest.org/blog/the-buzz/russia-india-had-plans-build-stealth-fighter-those-plans-are-25592?page=show (Last Accessed: 27 April 2018).

[5] Ibid.

[6] Dan Darling. “India Shelves FGFA Project – Where to Now?”. Forecast International. 24 April 2018. URL: https://blog.forecastinternational.com/wordpress/india-shelves-fgfa-project-where-to-now/ (Last Accessed: 25 April 2018).

[7] Ibid.

[8] Rakesh Krishnan Simha. “Flanker fleet down, but not out”. Russia Beyond The Headlines. 30 March 2014. URL: https://www.rbth.com/blogs/2014/03/30/flanker_fleet_down_but_not_out_34109 (Last Accessed: 24 April 2018).

[9] Neelam Mathews. “Dassault Reports Rafale Progress in India”. Aviation International News (AIN) Online. 19 April 2018. URL: https://www.ainonline.com/aviation-news/defense/2018-04-19/dassault-reports-rafale-progress-india (Last Accessed: 25 April 2018).

[10] Press Release. “Dassault Aviation and Airbus join forces on Future Combat Air System”. Dassault Aviation. 25 April 2018. URL: https://www.dassault-aviation.com/en/group/press/press-kits/dassault-aviation-airbus-join-forces-future-combat-air-system/

[11] Ibid.

[12] Giovanni de Briganti. “France, Germany Launch Future Fighter and Other Programs”. 27 April 2018. Defense-Aerospace. URL: http://www.defense-aerospace.com/articles-view/feature/5/192835/france%2C-germany-launch-future-fighter.html (Last Accessed: 28 April 2018).