Why would India buy the Rafael combat aircraft rejected by every other interested country—Brazil, Canada, the Netherlands, Norway, South Korea, Singapore, and even the cash-rich but not particularly discriminating Saudi Arabia and Morocco?
Consider the monies at stake. Let's take the example of Brazil, our BRICS partner. For 36 Rafales the acquisition cost, according to Brazilian media, was $8.2 billion plus an additional $4 billion for short-period maintenance contracts, amounting to nearly $340 million per aircraft in this package and roughly $209 million as the price tag for a single Rafale without maintenance support. Brazil insisted on transfer of technology (ToT) and was told it had to pay a whole lot extra for it, as also for the weapons for its Rafales. But the Brazilian air force had doubts about the quality of the AESA (active electronically scanned array) radar enabling the aircraft to switch quickly from air-to-air to air-to-ground mode in flight, and about the helmet-mounted heads-up-display. Too high a price and too many problems convinced the government of president Dilma Rousseff that the Rafale was not worth the trouble or the money and junked the deal, opting for the Swedish Gripen NG instead
.The prohibitive cost of the French aircraft supposedly made finance-cum-defence minister Arun Jaitley apprehensive. He did the right thing, as is rumoured, of revising the order downwards from 126 aircraft to 80 or so Raffles. The IAF headquarters pre-preemptively acquiesced in the decision to save the deal. However, if this change was affected in the hope of proportionately reducing the cost, it will be belied. Because in contracts involving high-value combat aircraft, the size of the order does not much affect the unit price, the cost of spares and service support, and of ToT! This is evident from the rough estimates of the per aircraft cost to Brazil of $209 million for 36 Rafales compared with the $238 million for 126 of the same aircraft to India!
ideally to Su-30s, the indigenous Tejas Mk-1 for short-range air defence, Tejas Mk-II as MMRCA, and the Su-50 PAK FA as fifth-generation fighter. Nor will the department of defence production officials disclose to Jaitley that the ToT provisions in arms contracts are a fraudulent farce because, while the foreign suppliers pocket billions of dollars, no core technologies, such as source codes (millions of lines of software) and flight control laws, are ever transferred. And that the local defense industry monopolized by defense public sector units (DPSUs) is incapable of absorbing and innovating even such technology as is, in fact, relayed to it because it only assembles aircraft from imported kits.
Terminating the Rafale deal will be disruptive but sending the message to the military, the DPSUs, the defence ministry bureaucracy, and foreign companies salivating for rich, one-sided, contracts that the Narendra Modi government is determined to make a new start and conduct defense business differently, is more important.
