Today’s papers carried reports on 50% Rafale offsets amounting to $4.5 billion or Rs 30,000 crore (“Rafale deal:France agrees to meet 50% of contract’s worth in India’s related sectors” http://economictimes.indiatimes.com/news/defence/rafale-deal-france-agrees-to-invest-50-of-contracts-worth-in-indias-related-sectors/articleshow/49487260.cms) — evidence that just the initial procurement cost of 36 of these so-called MMRCA is $9 billion as revealed in my preceding article in this blog dated Oct 19, with not an iota of tech-transfer, mind you.
The problem with the current indistinct offsets policy, and this is where the let-off is going to happen, is that what programs/projects to invest in and what indigenous capacity to build-up is left entirely to the French in this case to decide. In the past it has led to US defence companies writing off costs for “seminars and conferences” and the like against the offsets obligations. This offsets provision has not been tightened and Paris will feel free, for example, to consider its 5%-10% equity, via DCNS, in the Pipavav Shipyard, and similar extraneous expenditures as part of the Rafale offsets! It is — Heads French win, tails India loses!
The 50% offsets should be on the recurring expenditures on servicing and support for the lifetime of the aircraft $21 billion — minus upgrade costs — not on the $9 billion, meaning, fully $10.5 billion or Rs 75,000 crore should be extracted from Dassault as verifiable investment specifically in the aerospace sector programmes designated by DRDO. Otherwise the whole deal will be a dead loss. Recall that China got the whole production line and technology from McConnell-Douglas as a predicate for buying 100 of the latter’s medium range transporters in the 1980s — which seeded the aviation industry in China. But then Beijing knows where Chinese interests lie, and will move heaven and earth to protect and advance them. Delhi is in the business of enriching other countries at the expense of India!
All high-value armament deals are tense, nail-biting, poker games, except GOI invariably plays them as the perennial ingenue and amateur would — extracting nothing in exchange, in effect make one-sided transaction benefiting foreign states. Rafale as combat aircraft is no great shakes — it cannot even match the Su-30MKI in service with IAF for a decade. India should insist on Dassault transferring the entire production line along with the ancillary aerospace industrial capability as condition for buying this oldish plane. There’s still time because until the contract is signed GOI is in the driver’s seat — as I have written elsewhere; once it is signed Dassault will gain upper hand, and India can go cry in its cups.
Def Min Parrikar who is proving himself a weak and confused leader obviously cannot publicly over-turn PM Narendra Modi’s plainly quixotic announcement of the 36 Rafales-buy. But he can still ensure the demise of the Rafale deal by insisting that either India gets virtually the entire Dassault store to take the Rafale off France’s hands, or the PM goes over his head and the Cabinet’s in opposition to MOD’s advice, which Modi won’t do as he has enough political troubles which, incidentally, will only multiply once negative Bihar election results begin rolling in Nov 8. Then again, whether BJP wins or loses in Bihar, India is the big loser in the Rafale deal simply because the Modi govt won’t stand up for the national interest. And this is the way of a “nationalist” Indian government?!
Security Wise 
While I agree whole heartedly with the argument posted above in broad terms, as well as most specifics, This part ” Rafale as combat aircraft is no great shakes — it cannot even match the Su-30MKI in service with IAF for a decade.” is not correct, it bested the Su-30 on every parameter there is for comparison. Why not go for something like AMCA ?
The Russians have equally screwed us over the Su-30 deal-especially the maintenance and logistics support part. They are doing the same to the Navy over the M29K and dont forget the Gorshkov deal escalation of 1.7 billion over the old price of 800 million or so originally quoted price.
Self sufficiency is the need of the hour, but the Su-30 is no benchmark worth our money, the chinese have it, they reverse engineered it to make the J-11, the J-11B, then the J-11D and now the JY16. its a matter of time before the Pakis get the tech from their all weather friends.
we need a better aircraft than that, and the Tejas isnt one. All hopes were on AMCA, we must put our money and effort there, not in a hopeless light outdated machine built to replace the Mig-21, which will at best outfight the JF-17 or the older F16s. It has no reach or capability to fight a chinese Su30, J-11 or J-10B.
@Shail — Would help the debate and discourse advance more smoothly if one is moe aware of the latest developments and writings.
Considering Su-30 is internationally lauded, all things considered, as the best combat aircraft in the world today (see the analysis of this aircraft by the Australian combat aviation analyst of global renown — Karlo Copp a, for instance, at http://www.ausairpower.net/flanker.html), can you cite any evidence at all for your contention, that it is bested by, what, Rafale???!!! You are unlikely to find it, ‘coz there isn’t any.
Pushing AMCA, without ensuring Tejas LCA Mk-1A and Mk-II programmes get fast-forwarded is plain silly — but is precisely the line IAF has taken as a way to extend its reliance on foreign, preferably Western, aircraft. Because Vayu Bhavan knows that to support Tejas is to eventually get an AMCA but harping on AMCA while trying to scuttle LCA, furthers IAF brass’ own Western tilt! AMCA, after all, is only a plane on paper and it will not see the light of day before 2030-2035! So a safe option for the IAF to propagate.
Just so you know, reverse-engineering aerostructures is one thing — much easier than reverse engg a jet engine — the reason why all combat aircraft whose designs have been pilfered by China still are driven by Russian power plants, such as the RD-33 in its JF-17, etc.
Tejas programme is the seedbed for India’s aerospace future and GOI better invest the country’s manifold financial and human resources into it than buy some outdated French and other aircraft even as stopgap solution.
1. Supercruise
2. AESA
3. MICA / METEOR better than RVVAE, R73 E et al in Range, countermeasures, electronics, “no escape zone” thrice that of an AMRAAM etc
4. DVI, with HMDS, and superior interface for over the shoulder launch and lock after launch
5. Integrated SPECTRA – flew syrian missions without SEAD to ease its way
6. 13 Hard Points
7. Stealth features in frontal aspect
8. Better MMI , hardware and software architecture, T/W ratio, Wing Loading, maintainable by much less effort and manpower in the field etc etc etc
I get your argument ( and agree with the indigenous effort part completely) but like you hate the Rafale, I hate the monster machine who stays down on the ground longer than up and all things russian – crude, logistic nightmares, maintenance nightmares, pilot killer machines
Secondly, while the Tejas programme has undoubtedly sown the seeds and a few squadrons must replace the dying M21 and M27 fleets. But lets not overdo it. It has nil penetration capability and cannot defend against advanced aircraft based on its Radar/Wpn fit and lacks range due to puny internal fuel carriage, external carriage reduces hardpoints available for weapon carriage. limited WVR envelope etc etc
Also you havent talked about the possibility of the Chinese reverse engineered tech of the Su-30 reaching the Pakis. even more worrying, their developing countermeasures, knowing the eqpt onboard. That is a “threat in being.”
Looks like nothing will satisfy India when it comes to state of the art fighters such as SU30. What is your benchmark so far? Old Russian vintage MIGS-21/23/27?The crash rate is just embarrassing, Even SU30 have crashed…I forgot 40 Jaguars and MIG29..
It is not going to change one bit till we get the Defence R&D budget upto 20% of Def Budget p.a. yoy accumulations. Chinese had this as their national goal. We instead, have the French and US national goals for ourselves here.
Ref. @BK – “India should insist on Dassault transferring the entire production line along with the ancillary aerospace industrial capability as condition for buying this oldish plane.”
That Rafale is no match for Su-30MKI is a given but still why do you wish to import the whole of the Dassault line for taking Rafale off French hands. Are you trying to talk both ways? Is this anti-Rafale stance you make, some kind of jhunjhuna?
How can you persist with the view that Rafale is oldish, if you also at the same time wish to take Dassault production line. What will Dassault production line produce in India!?
@BK, sir, who and what institution stands for Indian interests can only be decided by how stands for the 20% benchmark. Mind you that only lets us stand on our own 2 feet as a peer. That still does not allow us tot exceed the competition. And in the circumstances where major interest groups are only interested in being the later day versions of the BIA, you really cannot expect one man or even two men, with 5 year terms, to start undoing a national problem. This expectation is too Messianic to make any sense.
Absolutely, going indigenous is the all-purpose answer for all of India’s (combat and civil) aviation woes.
Do you know the FDI(in aerospace industry in India) compared to China and why French will refuse TOT? French spent $62B on its development, they will not give India their prized technology on silver platter.