The declaration that the French Dassault Aviation was the lowest bidder for the estimated $18-billion, 126 multi-role combat aircraft deal is a landmark event both for India and France. In fact, it is a fitting culmination of the blossoming of ties between the two countries over the last two years during which French President Nicolas Sarkozy offered India transfer of nuclear technology when all other countries were creating obstacles.
This deal is a win-win situation for both countries. For the Indian Air Force, Dassault’s Rafale multi-role jet fighters will boost its fighter squadron numbers, which had seen a drop in recent years. India had always enjoyed an edge over Pakistan in conventional air power, but with the drop in the IAF’s fighter squadron power this edge was nearly lost. Now the IAF will regain its sharp edge vis-à-vis our neighbour. The interesting angle is the boost that this deal, when finalised, will give Hindustan Aeronautics Ltd because while the first 18 Rafale jets will be delivered in “fly-away” condition, meaning made in the Dassault factory and flown to India, the remaining 108 aircraft will be made at HAL’s facility with Dassault transferring technology.
There is still, however, one contentious issue left to be completed and that is the final price that India will pay for the aircraft. Negotiations on the same are expected to start soon. As of now Dassault is the lowest bidder, followed by EADS Eurofighter, a German-led European consortium which was the second-lowest bidder. The government of India has a benchmark price that it has worked out which is kept secret. The government will try to get the French nearer this benchmark; only then will the deal be finally completed. EADS, according to sources, is hoping that the French will not relent too much on price and that they, therefore, might still get the deal. But this might be just wishful thinking as for the French this deal is almost a do-or-die situation. The French defence minister is reported to have warned that the Rafale programme could be in danger if buyers do not materialise. The sale of the Rafale has been handicapped because of its price. The aircraft has been in action in Afghanistan and Libya. The excellence of the fighter aircraft is not in doubt, it’s the price. For the French it should not be too steep a price to have to stoop to conquer. President Sarkozy is aware of what this deal means to his image and his country’s economic well-being. The contract is expected to be signed within the next five to six months and with French savoir faire there is no reason why it should not go through.