European consortium offers 20% cheaper Eurofighter Typhoon

Discussion in 'Indian Air Force' started by Daredevil, Aug 22, 2014.

  1. Daredevil

    Daredevil On Vacation! Administrator

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    European consortium comes up with a cheaper proposal for its Eurofighter Typhoon

    The world's biggest defence deal is in danger of becom-ing one of the slowest in his-tory. More than two years after India zeroed in on the French Rafale fighter jet-after a tor-tured 11-year selection process-to replace its ageing MiG-21s, the Ger-man-led European consortium which was the runner-up in the race has sought to restart the dogfight by offer-ing a new, cheaper proposal for its Eurofighter Typhoon. The Narendra Modi Government, INDIA TODAY has learnt, is studying the German proposal even as Hindustan Aeronautics Ltd (HAL) has been nego-tiating with France's Dassault, the maker of the Rafale, to finalise agree-ments to produce the aircraft in India. The Rafale deal for 126 jets is esti-mated to cost 20 billion euros (Rs.1.6 lakh crore) over the next decade and is considered the biggest global de-fence tender.

    Representatives of the German government met leaders of the BJP regime in June, within weeks of the latter coming to power, and the talks culminated in a new commercial pro-posal that seeks to undercut the French bid. The new German offer could bring down the total value of the contract by Rs.20,000 crore over its 10-year duration. The scale of the "discount"-formally offered in early July to Defence Minister Arun Jait-ley-was substantial enough to create ripples at the very top of the Govern-ment, with Prime Minister Narendra Modi also being apprised about the development, sources said.

    In terms of the net present value- the hypothetical cost of buying the entire fleet in one go at current pri-ces-the new offer is at a little more than 10.5 billion euros while the French price is estimated to be a billion euros more. Calculated on the basis of the firm fixed price-or the amount India has to pay over 10 years-the German price comes to 17.5 billion euros.

    In 2012, it is believed the Euro-fighter was priced at more than 21 billion euros, a difference significant enough for the French to win the race. A long process of consultations has since been going on between Dassault and HAL to co-produce the fighter jet. Although these technical and com-mercial negotiations are learnt to be at an advanced stage, the contract has been hanging fire.


    The German offer, which has come through Eurofighter manufac-turer Airbus Defence and Space, has raised doubts over the future of the Rafale deal even though there is no scope for a revised price offer in the defence ministry's procurement rules. Experts believe that while there is no room for renegotiating the con-tract under the rules, the size of the German discount would force the Government to take a fresh look at the price offered by France. The counter-offer is supposed to be the outcome of hectic diplomatic manoeuvring by major European powers that have a high stake in the contract due to its sheer value and the job creation potential that can boost the economy of consortium member nations.

    One of the first indications that there could be room for a relook at the mega deal came, it is learnt, after German Ambassador to India Michael Steiner met top functionaries of the BJP Government shortly after it took over in June. After getting feelers that the new dispensation was keen to get an independent assessment of the contract value instead of going by the UPA government's agreement, Berlin is believed to have gathered the sup-port of Britain, Spain and Italy, major partners in the consortium, to be able to make a viable counter-offer. The new offer, significantly, rea-ched the Government in the first week of July, four days after French Foreign Minister Laurent Fabius met Indian leaders in New Delhi and emphasised the importance Paris was giving the Rafale contract. However, the French side was disappointed by the lack of any commitment from India as it was merely informed that due process was on.

    Also, a few days before the new offer, Jaitley made his first comment on the Rafale deal on June 24, com-ments that were seen as non-commit-tal at best. He said the government would take a "considered decision" on the contract, a departure from the line of the previous government that always acknowledged that negotia-tions with the French side were in an advanced stage.

    It is also believed that one of the reasons the Rafale deal has not progressed rapidly was the reluc-tance of previous defence minister A.K. Antony to sign off on a controver-sial price calculation by the IAF that assumed inflation at a self-derived rate and showed the French bid as cheaper. The competitors in the deal have alleged that the French com-mercial offer was "incomplete" and the price arrived at by the Indian side was based on data presented by Dassault that had to be interpreted by Indian financial experts.

    Experts, however, feel it would still be difficult for the Eurofighter to be back in contention due to the lack of renegotiation provisions. "I do not see any possibility proce-durally or politically for a change. The Government can of course do anything it wants but it will neither be practical nor expedient. It would also be difficult and embarrassing for the Government to keep the French side on hold for two years and go with someone else," says Amit Cowshish, a distinguished fellow at the Institute for Defence Studies and Analyses and a former financial adviser (acquisi-tion) in the defence ministry.

    India would also have to deal with pressure from Paris, given that Fra-nce has invested a lot of political cap-ital in the deal. France is India's third-largest supplier of defence equip-ment and major deals include the Scorpene submarine line and the up-grade of the Mirage 2000 fleet. But the counter-offer and its financial im-plications can create uncertainty for the Medium Multi-Role Combat Air-craft (MMRCA) project, the technical name of the Rafale deal. And that cannot be good news for the IAF as the project is already two years behind schedule and other replace-ment projects such as the Fifth Generation Fighter Aircraft (FGFA) with Russia and the indigenous Light Combat Aircraft (LCA) have also been crawling.

    While the FGFA project could see the jets arriving in the next six to eight years, the formal induction of combat-ready LCA fighters is likely to start next year. The first aircraft from the MMRCA contract would start arriving at least two years after the agreement is signed. The IAF believes the MM-RCA is a vital replacement and is needed at the earliest to maintain its conventional edge in the region.

    "The LCA has still not got its full combat clearance," says retired air vice marshal M. Bahadur, a distinguished fellow at the Centre for Air Power Studies. "Reversing the MMRCA process is very difficult and can be done only if it emerges that the process to arrive at the L1 cost itself in 2012 was faulty."

    Clearly, the high-stakes deal has got a twist in the tale. But it would only be in India's interest to ensure this does not further prolong the modernisation of the air force.

    http://indiatoday.intoday.in/story/german-led-european-cheaper-euro-fighter-typhoon/1/378279.html
     
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  3. Sameet Pattnaik

    Sameet Pattnaik Regular Member

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    ah ! sad to see my country in sticky situation cause of the stupid government of UPA with useless PM of all time !
     
  4. EXPERT

    EXPERT Regular Member

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    No need help play Pro Kabbadi here, go on with France.
     
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  5. pmaitra

    pmaitra Moderator Moderator

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    Do not go for broth made by too many cooks.

    If France chickens out, we have one to deal with; if Europe chickens out, we have whole lot of dolts to deal with. Certain EU countries also have a habit of laying down "conditions" to feel good about themselves while essentially selling objects that cause death.
     
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  6. The Fox

    The Fox Regular Member

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    May be the Indian Navy might consider this for Naval MMRCA which was roumered for such a long time eversince Airforce MMRCA best of luck With the Indian Navy Eurofighter
     
  7. Meriv90

    Meriv90 Regular Member

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    Pmaitra history proved you wrong already with the exocet missiles and the Falkland wars.
    And it has just happened again, Hollande is going to stop the Minstral affair.
    France is in Europe, if Ger,Uk,Ita and Spain start doing pressure you wouldnt receive either the rafale.
     
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  8. pmaitra

    pmaitra Moderator Moderator

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    Yes, what you are saying is correct, and I think most Indians agree that we need to be self sufficient instead of relying too much on the west.
     
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  9. Meriv90

    Meriv90 Regular Member

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    If i would be you, i wouldnt buy anything,no scorpene nor rafale, develop everything, but just build prototypes, with the US still in power no major conflict will start in the next decades, invest in your economy and just at the end, when US power weakens, start building up the army.

    A bad growth is as bas as a no growth
     
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  10. ghost

    ghost Regular Member

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    Sir ,

    With all due respect you are wrong.First Itlay is not India and India is not Itlay.

    1 India have two nuclear neighbors,One is always busy in pounding our borders with heavy fire,sending terrorist ,while other is busy in sending in its soldiers and claiming our land.

    2 For a good economic growth one needs to be a substantial power.To protect it's economic interest "drilling in south china sea" ,to promote its influence in the world which helps in creating economic opportunity"Vietnam".Everyone love to have a powerful friend.

    3 If we do not secure our self as per you US will save us?and what would be expected from us,in return?a subservient policy to US?We are proud of our freedom and for freedom should be maintained by oneself not on mercy of others.What if US chicken out in our conflict with china?there are no guarantee for free.Why should we live at mercy of US?

    4The thing you are propagating was once propagated by our Prime minister.Who said we do not need army ,we will manage with police ,as we do not have enemies.Next you had China capturing your land.Do you want this to happen again.

    5 Economic and power go hand in hand in world.Just see the example of Us and China ,Japan lacked in power front so was unable to sustain and increase its economy,which need influence in world affairs,for which you need to have power of muscle along with economy.

    6 War happens, it is not planned as per your convenience of date and time.

    7 If you remove NATO muscle power then what influence can Itlay exert on its own?

    8 We would like to build our own fighter more capable than Raffle,but by the time we built our own we would like to have a capable fighter for our security and to flex our muscles.Do you think are enemies will wait for us to increase our power or attack at our weakest time.And no we do not need US to protect us.

    9 If there is a major terrorist attack ,we will be at war with Pakistan,would itlay bomb Pakistan on our behalf ,or we have to beg US for it.There is no place for weak:tsk:in real world.
     
    Last edited: Sep 5, 2014
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  11. Dhairya Yadav

    Dhairya Yadav Regular Member

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    May I remind you, we are not part of NATO , neither do we have ultra good relations with US.

    Also, there is no reason why US would support India. The only friend India actually has is Russia. Even though we are diversifying our Armed Forces, Russia is always the highest priority For Indian Foreign Policy.Our other Friend is France, which was the only country except Russia to have no Objections against India possessing Nuclear weapons. Then there comes Israel. US is a economic partner for India not a Military one.

    I accept your view that we need to develop ourselves, But we cannot neglect the present for the future. India is at all time war like situation with Pakistan. Even a little incident can explode into Full-Fledged War. So, we need to maintain our forces nearly at all times. Our situation at eastern frontier with China is a lot more calm. And neither of India and China wants a war , at present
     
  12. Meriv90

    Meriv90 Regular Member

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    I wasnt refering to nato nor getting protection from the USA, i meant to invest the minimun possible that is more than enought to face Pakistan.
    US wouldnt allow a major change in the region without intervening if China moves.

    Please explain me how the lack of a offensive force has sinked japan economy on place of its deflation/lost decade.

    EDIT: I learnt that a tree that that has growth in a wrong direction can't be corrected Brazil for example is already on this way growing way less than what it should.
     
    Last edited: Sep 6, 2014
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  13. ghost

    ghost Regular Member

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    I had heard it somewhere,can't recall the details .So i stand corrected and admit i was wrong:namaste:
     
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  14. Sambha ka Boss

    Sambha ka Boss Regular Member

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    After reading the filth in British media against India after rejection of Eurofighter Typhoon, I hope India should never buy it.
     
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  15. Meriv90

    Meriv90 Regular Member

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    I'm curious what they wrote, could you link some articles?
     
  16. Dhairya Yadav

    Dhairya Yadav Regular Member

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    Sir, If India doesnt bolster its military, We will lose the deterrence against China. Then they will just take advantage of the situation like they did in 1962.
    Also, our military power is the only reason China resists to belittle and bully us like it does to nearly all its neighbors .
    Japan, Taiwan etc, unlike us, have US support. And if a war breaks out between us, Im sure that India wont allow US to interfere in the conflict.
    Sometime ago, there was an indirect proposal from US to form an counter alliance against China, But India declined.
     
  17. ninja85

    ninja85 Regular Member

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    discount discount discount,

    hurry up offer is for limited period only.:rofl::laugh::lol:
     
  18. Punya Pratap

    Punya Pratap Regular Member

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    India Considers Buying 126 Eurofighters From Germany | idrw.org


    MOSCOW, September 8 (RIA Novosti) - India may acquire 126 Eurofighter Typhoon combat aircraft from Germany, Deutsche Presse-Agentur reported Monday.
    Indian and German officials are once again negotiating a multibillion-dollar deal for the delivery of 126 German-made fighter jets to India, the agency reported, citing German Foreign Minister Frank-Walter Steinmeier.
    India and Germany previously discussed a similar deal, but India decided against the Eurofighter jets in 2012 and chose to acquire French-produced Dassault Rafale combat aircraft instead. However, an agreement has not been reached so far.
    The value of the possible contract is estimated at 7.6 billion euro (about $9.8 billion), according to the agency. Eurofighters are produced by the Bavaria-based Eurofighter GmbH company.
    Steinmeier is currently in India, where he has been in talks with Indian Prime Minister Narendra Modi and External Affairs Minister Sushma Swaraj. The topics under discussion were trade, investment, high tech cooperation and renewable energy collaboration, according to the Indian Ministry of External Affairs.
     

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