Wednesday, April 20, 2016

Has India Finalised Rafale Deal At $8.8 Billion?

Has India finalised its deal for 36 Rafale fighters at a contract value of $8.8 billion? The MoD was quick to advise a couple of recent media reports not to 'jump the gun' that a deal had finally been reached -- and no official comment is out yet on the deal. But the ruling party of India's government, the BJP, posted the image on the left a few hours ago on its official Facebook page.

This is perplexing at several levels. For starters, the infographic explicitly mentions that the deal has been 'finalised', something the MoD refuted only 72 hours ago. The message also looks to address continuing concerns that the Rafale deal was too heavy to handle -- the BJP says here that the Modi government has successfully 're-negotiated' the deal and saved an estimated $3.2 billion, bringing the contract value down from an earlier $12 billion.

Probably most strange of all, it is unclear where the $12 billion for 36 Rafale jets equation comes from. It is well known that the original M-MRCA, for 126 fighters, carried a prospective price tag of about $12 billion. So is the BJP forking out erroneous figures to illustrate a humdinger of a bargain? Again, unclear.

Right off the bat, that's Prime Minister Modi's photograph up there on the image. The message is simple: it was the Prime Minister (and his visit to France in April last year) who saved a deal that was in a doomed spiral of cost. The credit, the BJP is saying here, goes to the PM who ensured India got a tight deal even after scaling down the jet requirement from 126 to a measly couple of squadrons, 36 aircraft. It was leadership that saw the deal done -- that's the clear message from the BJP here, not the endless bureaucrat-led negotiations, not the multiple levels of international intrigue and instances of delegations flinging rules and books at each other, not about brinkmanship in numbers. Just cold, hard leadership. We'll only know how true that is once we get the details.

The MoD hasn't officially commented on the BJP post, except to say that a public announcement will be made when "there's something to announce". In the social media age, it's easy to imagine a political party's digital wing putting out information of this kind. It isn't however, when you consider that the BJP's own digital wing is comprised of a highly professional and networked team that rarely puts out material that isn't vetted at the highest levels of party (and government when it concerns public policy, deals etc). Finally, is the BJP referring to unconfirrmed reports that popped up a few days ago about the Rafale deal being finalised -- or were they simply given the go-ahead to break the news ahead a slightly mystified MoD. Answers ahead, surely.

The Rafale deal has had a turbulent ride in India. So, right now it's about waiting to see if the MoD feels the party that rules India's government has 'jumped the gun'.


Anonymous said...

Strange that the Govt./MoD have not come out with an official communication; but ruling party is already taking credit.

Prasanna said...

12 billion for 128 jets vs 8 billion for 36 jets, math is wrong

Anonymous said...

Great. I hope all views & debate come to an end. The first steps to strengthen IAF fighter force have been taken. Let us understand, after IAF wanted more Mirage 2000, this simple request has ballooned into a mega deal !

The helicopters fly day in & out. They are unsung heros even peace time, I do hope Raksha Mantri has fixed a deadline for new Light helicopters to firm the first squadron.
With long range fighters, IAF needs lower number of air bases, number of maintenance , support staff etc. they do not need boots on ground like army.

Anonymous said...

Has the BJP lost it the $12 billion was for 126 units not 36 the real deal is still pending which will be a follow on CKD SKD and finally Made in India as the IAF requires more than 150 units.

Anonymous said...

Who told you that the deal for the entire 126 tranche of Rafales were for $ 12 Billion ? Did you see the bid document ?
One other thing to remember is that the price tag for 36 jets includes the fixed cost of setting up ( 2 I hear) depots/ground support infrastructure, training etc. So unless you look at the detailed economics involved therein its unfair to paint it as a winner or a doozie !

Dalip Bhati said...

It is better to scrap the deal it is not worth it

Anonymous said...

@Anon 9:38 were you replying to me be specific when replying did you see the contract documents for 36 units personally? $12 billion was for the now scraped MMRCA with the IAF RFP for minimum 126 fighter requirements and then a follow on order. I have not seen the bid document for $12 billion contract nor you have seen the contact papers for the 36 units regarding defense contracts there is more than what meets the eye. I have no hard feelings for you.

Anonymous said...

If the Rafale deal is finalised for a total of 36 aircraft and probably some more later then how they would select another twin engined jet like the super hornet even via make in
India option. The French might also settle for a deal agreeing to manufacture the Rafale here in India.if a single engined jet is also to be considered then it might be the F-16 V along with the Rafale.

Sudip Das said...

12 Billion for 126 fighter jets i.e. 95 MUSD per jet

8.8 Billion for 36 fighter jets i.e 244 MUSD

Where is the saving , BJP is simply misleading the people of the country .