Few weeks ago a much awaited intergovernmental deal was finally inked between India and France for acquisition of 36 Rafale fighters. The deal costs 7.8 billion euros or about 58,000 crore INDIAN RS. The negotiations for the deal started about 18 months ago when PM MODI visited France and started this intergovernmental deal for acquisition of 36 fighters. The initial price which France was asking for was 12 billion euros which India side after negotiations bought down to 7.8 billion euros, and saved about 4.2 billion euros or around some 30,000 crore Indian rupees.
After this deal was signed a lot of posts were seen floating on social media and I too came across many posts which claimed that it's some kind of SCAM and the fighters are being bought at very very high rates. Some posts by experts suggested that the cost of single Rafale is around 700 crore rupees but MODI govt is buying it at price more than double of that at around 1600 crore rupees and that some corruption is done in this deal. The facts which were presented to back the claims were that the original MMRCA deal which had a price tag of 12 billion (some 80000 crore rs) euros would have acquired 126 rafale jets, but the same Rafale is now being bought for 8 billion euros (58,000 crore rupees). In this post I will basically break through the layers of the deal and explain the difference between two deals.
|A SOCIAL MEDIA POST|
The original MMRCA deal was originally supposed to give IAF 126 Rafale jets with a price of 12 billion US$ when the selection was done but as the deal progressed Dassault the manufacturer not only claimed that the total price would be more stating that since the tender was done the price of fighters has increased. By January 2014 it was reported that cost has escalated by more than 100% of the original proposed cost and now the deal would cost alarming 28 billion dollars or more.
They also had issues with the terms of Transfer Of Technology (TOT) and also with the offset clause according to which rafale had to invest 50% of the deal money back in India. They also refused to take guarantee of the 108 fighters which were supposed to be manufactured by HAL in INDIA.
On 31 July 2015, Defence Minister Manohar Parrikar stated in Rajya Sabha that the deal for 126 MMRCA was officially withdrawn by the government .
BREAKING THE NEW DEAL-
The new deal is completely different from the old deal, this new deal has a lot of new conditions added to it. The original deal was just for purchase of 126 fighters at price of 12 billion dollars(later claimed to be more than 28 billion dollars), but the new deal is not just about the fighter but also provides the following advantages
- The new deal has a provision for complete TOT or transfer of technology. With this we will be able to get the much needed Engine and AESA Radar tech which INDIA desperately needed. India is fully capable of making indigenous jets like TEJAS but still faces issues with jet engine technology.
- The deal also includes a weapons package which will give INDIA access to METEOR BVR missile which has range of over 150 kms and SCALP(Storm Shadow) cruise missile which has range of over 550 kms. This will be a force multiplier for IAF and will give IAF unprecedented capabilities.
- Dassault will not just provide the jets in flyaway condition but will also tailor the jets according to the needs of Indian Air Force. The planes will have Israeli Helmet Mounted displays and a radar warning receivers.
- French are also guaranteeing that the fleet will be atleast 75% available at all times. IAF fleet of fighters have struggled with spares and even our main fighter SU 30 MKI acc to CAG has availability of less than 60 % which IAF now claims is above 65 %.
- A batch Indian Air Force pilots and technicians will also get free training in FRANCE.
- The offset clause is of 50% so 3.9 billion Euros nearly will be invested back in small and large firms and this will not just give us technology but will also create jobs within India.
- Also not to forget that Rafale is a NUCLEAR CAPABLE PLATFORM which means it can deliver nukes. A lot of people are unaware of facts that not all jets can deliver nukes because the electronic circuits of such jets has to be specially made or the delivery will roast the circuits of the fighter delivering them. Some SO CALLED EXPERTS SAID that we could have bought 2 to 3 SU 30 MKI for same price but people don't know that if we make special Sukhoi's for nuke delivery this will increase the cost of each jet by multiple times which make it even less feasible option.
- The deal also accounts for inflation cost of about 3 to 3.5 % whereas the original inflation which was considered was about 4.5 to 5% per annum.
RAFALE DEAL ALONG WITH ALL THE ADVANTAGES IS A BARGAIN AT 7.8 BILLION EUROS. IF WE BREAK THE PRICE TAG OF 7.8 BILLION EUROS WE SEE
- If you see the price break-up of the Rafale deal of just the 36 aircraft is about 3.42 billion Euros.
- The armaments cost about 710 million Euros.
- Indian specific changes, including integration of Israeli helmet-mounted displays, will cost 1.7 Billion Euros.
- Associate supplies for the 36 fighter jets will cost about 1.8 Billion Euros
- Performance based logistics will cost about 353 million Euros.
ALL THIS SUMS UP AND MAKES THE DEAL A BARGAIN 7.8 BILLION EUROS. WE NOT ONLY GET THE JETS BUT ALSO WEAPONS,TECHNOLOGY ( via offset ), SUPPORT FROM THIS DEAL. THIS DEAL IN LONG TERM WILL CHANGE THE FACE OF INDIAN AIR FORCE.
THE TECHNOLOGY GAINED FROM IT CAN BE IMPLEMENTED IN OUR OWN FIGHTERS LIKE TEJAS , AMCA.