India many consider downsizing the Rafale fighter order from 126 to 80 following concerns over cost escalation, Indian media reports.
The DNA newspaper quoted an unnamed IAF officer saying, “Hindustan Aeronautics (HAL) has asked France to re-consider the price. Cost escalations and disagreements over production have delayed the contract.”
The report speculated that in the absence of an agreement on price, India my cut down the order to 80 in order to save money and keep the purchase within the originally budgeted amount of US$ 12 billion.
The Indian MoD and Dassault have not reacted to the report. In fact, both sides have officially kept mum over the progress in the negotiations over the last few months while news quoting unnamed Indian officials has been trickling in from time to time, mostly indicating that the delay is over price negotiations. These reports have not been denied either.
The cost of the program was $12 billion when the initial tender was floated. The price shot up to $18 billion when Dassault won the contract as the lowest bidder in January 2012. The transfer of technology, life cycle costs and creating assembly line might finally cross $20 billion.
The government may find it difficult to justify a nearly 80% price hike for the Rafale jets to the Indian parliament. In the past, the accounting watchdog, the Comptroller and auditor general (CAG) has criticized the government for its fiscal conduct while concluding defense deals.
According to reports, India would have to pay an advance of at least $1.5- 2 billion to Dassault, manufacturer of Rafale jet aircrafts. This will hamper other defense equipment procurements which are waiting in the wings such as purchase of Boeing Apache and Chinook helicopters among others.
Indicating a that money was the problem in the Rafale MMRCA deal, A.K.Antony, former Defense Minister had said in February this year “Major procurement can only be possible in the next financial year. With 92% of capital budget exhausted, there is no money left for the fiscal year”..
The new government of Prime Minister Narendra Modi appears to have inherited a depleted government kitty. The Prime Minister seems to be less in favor of imports and more for indigenous production. “We need to give importance to latest technology. Why should we import defense equipment? We must be self-sufficient. Why can’t we sell our defense equipment to other nations?” Mr Modi had questioned while dedicating to the nation the INS Vikramaditya aircraft carrier on June 14.
However, Arun Jaitley, Defense Minister did hint about expediting defense purchases. "The entire resources of the country, notwithstanding various pressures, have to be made available in significant amount for those in defense of the country," he said.
The picture regarding defense procurement is expected to be clear after July 10 when the union budget for fiscal year 2014-15 is presented in parliament. While the defense forces have asked for a higher allocation, it is unlikely that all their demands would be met. However, a substantial increase in capital outlay would be the clearest indication of one or major defense procurement deals in the offing this fiscal.
The Indian Air Forces Su-30MKIs and the French Rafale fighters will come together for a ten-day air exercise called the 'Garuda-5', aimed at training the pilots and crew of Indian and French fighters in air superiority operation in Rajasthan's Jodhpur airbase from June 3. The French composition for the Garuda- 5 will include four Rafale multi-role fighter aircraft and one air-refueler aircraft with more than 100 personnel
India has finally sealed a work share agreement with the French-firm Dassault Aviation for building 70 per cent of the Rafale fighters domestically, according to New Delhi Television. India will acquire 18 of the 126 Rafale fighter jets it is buying from France in "fly away" condition, and the rest will be manufactured by the local firm Hindustan Aeronautics Limited (HAL)
As the development and integration of a new-standard Rafale fighter, the F3R gets underway by Dassault, its impact on the Indian MMRCA procurement could be significant. With the current official information on the Indian deal being that ‘negotiations are underway, it might just be possible that the Indian side might look at the F3R configuration seriously before freezing the aircraft configuration
Air Marshal S. Sukumar, deputy chief of air staff, has publicly asserted that the Indian Air Force will sign the multi-billion fighter aircraft deal by the end of this fiscal
A top Indian defence official negotiating a $12 billion deal to buy France's Rafale fighter jets has died of a heart attack; further complicating talks over the delayed contract. Arun Kumar Bal, a joint secretary in the defence ministry in charge of air acquisitions, died Wednesday at the age of 52, meaning a replacement will now have to be named
On an official visit to India, French Defense Minister Jean-Yves Le Drian met with his Indian counterpart to discuss “regional and international security challenges of mutual interest”. On top of the agenda was the sale of 126 Rafale combat aircraft to India and the security situation in the Afghanistan-Pakistan region
The French Directorate General of Armaments (DGA) has received the first of the ten Rafale F1 naval jets upgraded to F3 standard for expanded mission capabilities on October 3, 2014. The upgrade is intended to ensure the Navy operates a homogeneous fleet of F3 standard aircraft
French Rafale fighter jets carried out air strikes on Islamic State (ISIS) targets Friday, according to media reports. Rafale fighter jets accompanied by support planes struck the depot in northern Iraq on Friday morning, and it were “entirely destroyed,” President Francois Hollande was reported as saying
The $22 billion fighter aircraft deal between India and Dassault is close to being inked, Indian Air Force Chief (IAF) Arup Raha said Wednesday. Raha said a deadline for finalization of the deal had not been set but added "it`s going to happen soon"
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