September 22, 2017
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Clarity crunch
Rafale deal still faces difficulties due to disagreement

The much talked French Rafale deal in which Indian Air Force is supposed to acquire 36 fighters from French manufacturer Dassault Aviation has run into rough weather due to disagreement on procedural issues and procurement guidelines.

The Ministry of Defence is caught in crossfire between French Dassault Aviation officials and Indian defence officials who are trying to impose guidelines for procurement of these fighters from off the shelf purchase agreement.

Although India and France are trying to work hard to hammer out an agreement as how both sides can expedite the deal on a fast track basis, the reasons behind the delay in signing the final agreement are getting complex and not going to happen any time soon.

It appears both sides are on a two different line altogether about the deal and certain procedural issues are going to be further complicated which will take years if they want move in this format, said a senior government official.

The IAF is keen to acquire 36 Rafale jets as quickly as possible with option clause open for another 18 Rafale if the government feels that the deal is progressing well and it has required level of budget to buy them on another date.

The whole deal may cost 7.5 billion USD going by the present pricing but MoD insiders believe that the deal can accelerate once it is clinched mainly in terms of spare, weapons and other items.

Currently, the IAF has been reduced to have 32 squadrons but the IAF has already projected that it needs a minimum 44 squadrons for various operational role in which its jets should be able to carry out air to air and air to ground strikes.

The Rafale jets can also give a boost to IAF capability enhancement as the jets are equipped with 3D target acquisition capability.

The problem is if the government to government deal between India and France is going to be the main criteria then French government will have to secure the deal first from Dassault Aviation and then offer to Indian government.

For that an offer letter should first come to Indian government in which detailed terms and conditions can be laid down.

The French government does not have such a structure at the moment as Dassault is a private company and doing business on its own way.

If the deal is going to be between Dassault and Indian MoD then DPP rules may apply to this deal as it will no more be government to government deal.

The French parliament will have to agree to this deal and lot of formalities will have to be cleared before the government of France can agree to such a deal.

Since Dassault is now picking up market with its fighter sales with Egypt and UAE, there is hardly any taker for India deal in France which could be pain staking even if the French Parliament overcomes hurdles.

Today no one is keen to get into a deal which involves private players as it may later create problems including allegations of bribery or some scandals for the political leaders.

Despite NDA government’s promise of simplification of defence deals, no company believes that it actually happens on the ground.

Earlier one can pay bribe and get a defence deal but now the deals are not done as no one dares to ask for a bribe. Thus, there is no idea for a company or its representative to find out at what stage the file is stuck.

The senior MoD officials are of the view that the Indian government must decide whether it wants the Rafale deal within the DPP or outside the DPP.

That will clarify the whole process.