Anurag Kumar
People familiar with the matter said on Tuesday that India and France have yet to conclude negotiations on the technical and commercial aspects of deals for the Indian military’s planned procurement of 26 Rafale Marine combat jets and three Scorpene submarines.
The defence acquisition council (DAC) approved the Indian Navy’s plans to purchase 26 Rafale M aircraft and three submarines from France on July 13, the day that Indian Prime Minister Narendra Modi began a two-day visit to France. It was expected that official announcements regarding the agreements would be made during the visit.
The people, who spoke on condition of anonymity, cautioned against reading too much into the absence of the two agreements from the 25-year road map issued on July 14 at the conclusion of Prime Minister Narendra Modi’s visit. According to them, India is “very clear” regarding the acquisition of Rafale M aircraft and Scorpene submarines.
Before final contracts are signed, entities on both parties, including French firms and the Indian defence ministry’s department of procurement, will negotiate the technical and commercial aspects of the deals, according to the people.
On July 6, France’s Naval Group and India’s state-owned Mazagon Dock Shipbuilders Limited (MDL) inked a framework memorandum of understanding (MoU) regarding the construction of three Scorpene submarines in India. In January, Naval Group and the Defence Research and Development Organisation (DRDO) signed a second agreement for the installation of air-independent propulsion (AIP) systems on submarines.
This will be a follow-up order to an earlier contract in which MDL built six Scorpene or Kalvari-class submarines with technology from Naval Group as part of a 23,562 crore Project-75 programme.
Since the original contract was signed in 2005, additional price negotiations are necessary, according to the sources.
The agreements for Rafale M jets and Scorpene submarines are on track, though the two parties must negotiate pricing, delivery date, and the “Make in India” component, according to the sources.
The combined value of the two deals is estimated to be between €9 billion and €10 billion, although the ultimate price will be determined following complex negotiations between India and France.
People sought to differentiate between General Electric and Hindustan Aeronautics Limited’s (HAL) decision to manufacture GE F-414 jet engines in India for the Light Combat Aircraft Mark 2 and France’s Safran Group and DRDO’s plans to jointly develop a new engine to power India’s next-generation advanced medium combat aircraft (AMCA).
In the case of the GE F-414, the Indian side is procuring a 1970s-era engine and will produce 80% of it domestically, but will not have access to 20% of it, including “very critical technology,” according to the sources. They stated that Safran Group intends to collaborate with DRDO to develop a custom engine that satisfies AMCA’s specific requirements.
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This is consistent with France’s intentions to co-design the next generation of military equipment with India, as opposed to merely transferring technology. The Indian side will be able to export this new engine and will be in a position to independently develop the next iteration of engines, according to the sources.
