Taking The Final Call On What Was Originally Proposed By France On February 20, 2006

Chronology Of The M-MRCA Procurement Saga

* Indian Air Force (IAF) formulates its Air Staff Qualitative Requirement (ASQR) for medium multi-role combat aircraft (M-MRCA) in the late 1990s.

* Request for Information (RFI) for 126 M-MRCAs, with an option for another 63, issued in late 2001. 

* Dassault Aviation offers to supply 40 Rafale M-MRCAs to the IAF in a single-source G-to-G deal. The offer is made by Charles Edelstenne, the then CEO of Dassault Aviation, when he calls on the then Minister of State for Defence Rao Inderjit Singh in New Delhi on February 20, 2006. The IAF’s then Deputy Chief of the Air Staff Air Marshal A K Nangalia is also present at this meeting. Edelstenne is part of the entourage of the then visiting French President Jacques Chirac.

* Issuance of a Request for Proposals (RFP) was planned for December 2005. However, the formal 211-page RFP is released only on August 28, 2007. The RFP contains single-stage two-bid system criterion (separate quotes for the technical and for commercial evaluation forming part of the submissions from various concerned OEMs). Bidders are given a time-frame of six months to respond to the RFP by March 2008. The RFP includes a direct industrial offsets obligation of 50%, raised from the original official requirement of 30% as contained in the Ministry of Defence’s (MoD) Defence Procurement Procedures of 2006. The RFP states that the IAF will initially acquire of 86 single-seat and 40 two-seat M-MRCAs, and retain the option to acquire another 63 M-MRCAs at a future date. Of the 126, 12 single-seaters and six tandem-seaters are required to be supplied off-the-shelf in flyaway condition, while the remaining 108 are to be licence-built in India. This will include 74 single-seaters and 34 tandem-seaters, of which 11 will be built from semi-knocked down (SKD) kits, 31 will be built from completely knocked down (CKD) kits, and 66 made from indigenously manufactured kits (IMK).

* By late May 2009, the IAF’s Technical Evaluation Committee (TEC) concludes its technical and staff evaluations of the RFP responses from the six bidders.

* Sequential in-country flight evaluations of all six contenders begin in mid-August 2009 and continue through to May 2010. Two teams of IAF test-pilots conduct the flight evaluations at Bengaluru, Leh and Jaisalmer. Besides possessing cold-weather terrain, Leh is a high-altitude location, while Jaisalmer is a desert area where hot winds blow. Planning for the trial schedule began in early 2009, with the IAF test-pilots being trained at the respective bidder’s country of origin to fly the aircraft, under Phase-1. Phase-2 calls for flight-trials in Indian airspace and in Phase-3, the six M-MRCA contenders are run through a series of tests to check the efficacy of their guided-munitions by firing them at firing ranges located within the respective bidder’s country of origin.

* All six flight evaluation reports, duly vetted by the Technical Oversight Committee (TOC), are completed by mid-July 2010.

* In April 2011, the IAF shortlists Dassault Aviation’s Rafale and Eurofighter GmbH’s EF-2000 Typhoon.

* On January 31, 2012, the MoD announces that the Rafale has been selected as the IAF’s new-generation M-MRCA and estimates that contractual negotiations should be completed by October 2012 by the MoD’s Commercial Negotiations Committee (CNC) after receiving approvals from the Competent Financial Authority (CFA).

* On April 10, 2015, the Govt of India formally requests both the French government and Dassault Aviation to supply on a G-to-G basis 36 Rafales (32 single-seaters and four tandem-seaters) as soon as possible, subject to contract negotiations for these 34 Rafales being successfully concluded within a 90-day period. Concurrently, supplementary contracts will be inked with SNECMA Moteurs for two spare M88 turbofans, with Dassault Aviation for ground-support hardware for first- and second-line MRO, with THALES for a cockpit procedures trainer and a full-flight tactical training simulator, with MBDA for the guided-weapons package, and with Dassault Aviation for a maintenance training simulator.

Eventually, in the fullness of time, the IAF will end up with 189 Rafale M-MRCAs. That's a given. But the negotiations had got stuck over the cost of licenced-production of the 108 units. India was haggling over the labour cost parameters that are graded from 1 to 10. While the Russians had obtained Grade 6 for the Su-30MKI licenced-production programme, the French were asking for 8, while the Indians wanted it to be limited to 7. So, in the end, a compromise was struck under which India would order 36 Rafales off-the-shelf without any offsets of any kind and the French in turn would tone down their stance & come down to 7. Therefore, in nett terms, the French have won and India’s illogical negotiating shortsightedness (from 2012 till now) has been fully exposed. And NaMo too has realised at last that there are clear technological and human resource limits to how far the ‘Make in India’ mantra can be flogged. And this deal for 36 Rafales was conceived entirely by Union Finance Minister Arun Jaitley and was fully endorsed by the PMO. Everyone else was in the dark on this issue. If 153 Rafales can be similarly ordered in successive tranches, then that will be the ideal solution. Because paying an exorbitant price for the so-called licenced-production of Rafales just to keep a few thousand employees of HAL gainfully employed for the next 20 years DOES NOT stand up to logic. Nor does such licenced-production lead to self-reliance of any kind anywhere. Far better therefore to utilise the money saved for the Tejas Mk2/LCA (Navy) Mk2 R & D effort, where at least 80% indigenisation can be expected in all domains except for the propulsion system.

‘Make in India’ For Rafale Has Already Begun

As for those ‘desi’ journalists claiming that the off-the-shelf procurement/s of the Rafale M-MRCA will pose a huge setback to the Govt of India’s ‘Make in India’ industrial promotion policy, the poster below shows just how totally wrong these ‘desi’ journalists are. They obviously did not do their homework during the Aero India 2015 expo last February!  

Ukraine-Origin Products On-Board Su-30MKI

When the Soviet Union dissolved in late 1991, Ukraine was left with about 30% of the Soviet-era military-industrial facilities on its territory, including about 750 factories and 140 scientific and technical institutions. Presently, 300 enterprises, institutions and organisations  employing more than 250,000 people are producing military equipment in Ukraine. Of these, 75 are registered as manufacturers of military products and services that are subject to state secrecy, including rocket and guided-missile technologies. 

The state holding company Ukroboronprom, established in 2010, oversees 134 Ukrainian state-owned military-industrial enterprises that employ 120,000 workers. Ukraine exports the rest, in the amount of US$1.3 billion worth of arms annually, which made Ukraine the eighth-largest weapons exporter in the world between 2009 and 2013. Ukroboronprom’s sales reached US$1.79 billion in 2013, an increase of 17% in 2012. Russia was the third-largest buyer of Ukraine-origin military hardware from 2009 to 2013, after the PRC and Pakistan. 

Following Russia’s annexation of Crimea in March 2014, Ukroboronprom decided to halt all exports of weaponry and military-industrial hardware to Russia, whose outstanding orders from Ukraine in the civilian and defence sectors were at that time valued at more than US$15 billion. Terminating these contracts has adversely affected 79 Ukrainian and 859 Russian military-industrial firms. Ukrainian exports represent only a small fraction—between 4% and 7%—of Russia’s overall military imports. The number of buyers of Ukraine’s nuclear and ballistic missile technologies is fairly small but includes the PRC, North Korea, Syria, and Iran. PRC and North Korean agents have on several occasions been caught attempting to break into YUZHMASH for trying to acquire long-range ballistic missile technologies.

Ukraine’s total arms exports have been growing steadily, from US$20 million in 1994 to US$600 million in 1997 and US$1.5 billion in 2001. In 2002 the Industrial Policy Ministry of Ukraine and China’s Commission for Science, Technology and Industry for National Defense (COSTIND) signed a protocol on cooperation in the military-industrial arena. Ukraine’s present-day weapons shipments to China in 2002 amounted to a mere US$50 million a year.  In 2002, Ukraine became the world’s fourth-largest weapons exporter and sold weapons and military technologies to China worth US$700 million, which accounted for 31% of Ukrainian exports that year. In 2011, 43% of Ukraine-built weapons were sold to the PRC, while in 2013 Ukraine became the PRC’s second-largest trade partner in the CIS, while China became Ukraine’s biggest military customer in Asia.