A recent French media report offers insight into the French position in the negotiations with the Indian defense ministry on the MMRCA fighter aircraft purchase by the IAF. Here's an edited translation of the report and an analysis of what it could mean.
A couple of weeks back, French business publication Usine Nouvelle published a report on the anticipated workshare of Dassault’s Rafale fighter aircraft, in the context of its selection as the preferred, lowest, technically qualified bid in the Indian Air Force (IAF) tender for 126 Medium Multi Role Combat Aircraft (MMRCA).
The report, titled, Le Rafale indien resterait largement produit en France or Rafale said to remain largely made in France, by Hassan Meddah, has an insightful review of the French side of the negotiations with the Indian Ministry of Defense for the IAF procurement of 126 fighter aircraft, and seems to demolish some long-standing assumptions regarding the MMRCA tender.
Before we look at the substance of the report it is important to note that the publication, Usine Nouvelle, is generally considered a respected and credible publication that has been around since the year, 1891.
What follows is an edited gist from a reliable English translation of the report sourced by StratPost to try and make sense of the MMRCA negotiations currently underway, from a French perspective, for the largely English-speaking Indian readership.
While care has been taken to ensure the correctness of the English version, it is possible that some language-specific nuances may have been lost in translation. That notwithstanding, this translation is something that can be confidently relied upon.
French companies should remain assured of retaining the majority of workshare linked to the production of 126 (Rafale) fighter aircraft for India, because of the technical complexity of the aircraft.Little is known about the division of workshare between the two countries and the only certainty is that 18 aircraft will be assembled at the Dassault site in Merignac, Gironde and the other 108 in India.
While the introduction above says that 18 aircraft will be produced in France and the rest in India, what follows hereon seems to indicate that things may actually turn out differently and may not effectively amount to much.
However, French sources clarify that the workshares will remain very much in favor of French companies, estimating even that they would still get far more than 50% of the production associated with the future contract during the initial years.This will be good news for the Rafale supply chain, which is as French as can be: The manufacturer relies almost exclusively on French companies for the production of its combat aircraft. In total, 500 companies are participating, generating about 7000 jobs.
The report goes on to explain that even though the MMRCA tender required compliance with the 50 percent offset requirement, there are many reasons why this might not actually transpire and the workshare would remain in favor of French industry.
Even though New Delhi’s RFP originally demanded offsets of 50% of the contract value and technology transfers, several factors could explain this work division that is so favorable for French industry.Firstly, the assembly of a combat aircraft does not constitute more than a quite modest fraction of the value added of the product, about 15%, according to some experts.
So even if India were to assemble the 108 aircraft, the report indicates that this wouldn’t mean much in terms of the value of the workshare [The report also seems to confuse offsets with licensed production].
It also touches upon the the technical competence of Indian industry, being very clear that it considers the production of something like an AESA radar to be beyond Indian capability.
Secondly, India’s companies are far from mastering the technical complexity for producing the electronic equipment of the Rafale. Their contribution could thus remain very limited at the beginning, and focus on fuselage elements, wings, glass covers… Even more so because technology transfers will be progressive. Rather than going for an all-encompassing understanding on the whole aircraft, the cooperation will go through several signature stages for licenses for every element. As for producing critical sub-assemblies like Thales’ AESA radar, mastering such technologies seems far fetched.
Note the general silence on progress with the deal and the repeated Indian pro forma insistence of confidence in the selection.
Then note the British, German and Russian statements that the negotiations were troubled, with oneGerman leader even pointing to the number of pages of the French proposal, as indicative of the trouble with it.
Usine Nouvelle may have revealed more than it corroborated.