Exit in sight for India on order for 126 aircraft from Dassault ?
The Indian Military Review states that&nbsp; the &ldquo;endless&rdquo; delays to the deal to buy 126 aircraft from Dassault brings into question the financial viability of the deal. It adds that questions over whether Dassault is willing to comply with technology requirements and cost control, and the current pressure to &ldquo;Make it in India&rdquo; &nbsp;mean that the deal falls outside of the limits imposed by the Request for Proposal (RfP). This, it suggests, effectively means that the MMRCA RfP process may be scrapped, freeing the government to make a decision in light of larger national interests.Indian Miliary Review 14-May-15
What happens to the on-going medium multi-role combat aircraft (MMRCA) negotiations?

By: IMR May 2015 Issue

Aircrafts that bid for MMRCA Tender

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-- According to an item published in the latest issue of Indian Military Review it has been analysed what would happen to the on-going medium multi-role combat aircraft (MMRCA) negotiations?The joint statement has made it clear that it will continue as a separate issue and that the 36 aircraft deal is not linked to it. To understand this, one needs to read between the lines. By delaying it endlessly, the 126 aircraft deal has become a question mark on its financial viability. Besides, there have been serious questions on Dassault's willingness to comply with technology requirements and cost control. In the current context of 'Make in India', it may need to be dealt with outside the limits imposed by the Request for Proposal (RfP). In effect, this will mean scrapping the MMRCA RfP process so that the government is free to make a decision in light of larger national interests. Effectively, this inter-governmental agreement has sealed the fate of the RfP process.Giving details, the new issue of Indian Military Review, published from Gurgaon said that in the protracted contract negotiations between India and Dassault, both sides had refused to budge on what they perceived as their viewpoints on the terms and conditions of the MMRCA tender. Dassault initially had reservations on the role of state-run HAL as lead integrator for the 108 Rafale aircraft to be built in India under technology transfer from France, had the MMRCA RFP acquisition process finally gone through. There were also reportedly some concerns raised on accountability. There were earlier reports of some differences between India and Dassault over the pricing of the deal, which could have been pegged at around $20 billion.The MMRCA RFP had stipulated that only 18 of the proposed 126 fighters would be acquired in "flyaway" condition from the foreign vendor. In fact, the French government tried to resolve the issue, with its defence minister making a flying visit to India, but the deadlock could not be broken since both sides stood firm. Defence minister Manohar Parrikar had also insisted Dassault must fully adhere to the terms of the MMRCA RFP, issued back in 2007, if the deal was to be signed. India perhaps assumed that sooner or later the French would be desperate enough to come around in order to bag the multi-billion dollar deal.The commencement of contract negotiations with Dassault Aviation was a huge boost for the France-based company, which had till then struggled to find an international buyer for Rafale. But, in those three years, India never signed a formal agreement with the aviation company. The two camps, reportedly, could not agree on a price. And on April 10—during Indian prime minister Narendra Modi's visit to France—India signed another deal to buy 36 "ready-to-fly"of the Rafale fighter jets from Dassault. The decision to buy these 36 aircrafts means that the earlier deal is more or less history.But is it? Are these 36 fighters in addition to the 126 fighters being negotiated between Dassault and the Indian defence ministry under the MMRCA tender, floated in 2007?There is skepticism, especially within Hindustan Aeronautics Ltd (HAL), about whether the tender for 126 Rafales could survive the purchase of 36 fighters in flyaway condition.The need for more fighters has been extensively debated, but the stumbling block has been the Rafale's forbidding cost. Worryingly, the government is silent on what it is paying, nor did the 20 agreements signed in Paris include anything on the 36 aircraft. By conventional contracting norms, an "options clause" allows the buyer to procure additional equipment at the same price as the primary contract.Defence minister Manohar Parrikar also made it clear, on 13 April, that if India goes in for additional French Rafale fighters, after the outright purchase of 36 jets decided during the Modi-Hollande summit in Paris, it would also be through government-to-government deals, suggesting that commercial negotiations for a larger deal with Dassault Aviation have been shelved.Even though Parrikar did not utter the words "scrap" or "cancel" in connection with the MMRCA project, he used enough analogies to stress exactly that. "A car cannot travel on two roads at the same time. The other road (MMRCA) had a lot of problems," Parrikar said.A decision to abandon commercial talks would mean the end for what had been touted as one of the world's biggest defence deals, and could give hope to rival manufacturers, experts said.2000: The Indian Air Force (IAF) expresses interest in buying medium multi-role combat aircraft (MMRCA) to replace Soviet-era MiG-21s. Over the years, the aging MiG-21s have been involved in multiple accidents.2001: The IAF issues requests for information (RFI) for 126 combat jets. But there is little activity for the next six years.2007: The Indian government issues tenders for 126 MMRCAs, for an estimated cost of Rs42,000 crore ($6.7 billion, now). The request for proposal (RFP) is issued to six vendors: Russia's MIG-35 (RAC MiG); Sweden's JAS-39 (Saab); French Rafale (Dassault); American F-16 Falcon (Lockheed Martin); Boeing's F/A-18 Super Hornet and Eurofighter Typhoon (made by a consortium of British, German, Spanish and Italian firms).2008: US majors Boeing and Lockheed Martin, Russia's United Aircraft Corporation, France's Dassault, European consortium's European Aeronautic Defense and Space Company (EADS) and Saab submit their bids.2011: The defence ministry says it will start discussions with Dassault and EADS. The ministry tells American companies Boeing and Lockheed Martin that their proposals have been rejected.2012: India shortlists Dassault, after it submits the lowest bids for the deal. According to the RFP, the winner of the contract would supply 18 of the 126 aircraft to the Indian Air Force in 36 months from its facilities, and the remaining would be produced at Hindustan Aeronautics Ltd plant in Bangalore.2013: Negotiations continue during the year.2014: India decides to put the deal on hold due to budgetary constraints until 2015. Dassault remains hopeful.2015: After three years of negotiations with Dassault, Modi announces on April 10 that he has ordered 36 "ready-to-fly"Rafale fighter jets from Dassault. A day later, Parrikar indicates that the move is the right direction, and says that in future India would deal directly with the French government instead of the aviation company.