Rafale DH/EH of Indian Air Force : News and Discussions
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Egyptian Rafale escorting the plane of Mohammed ben Salmane (Deputy Prime Minister and Saudi Defense Minister) over Egypt (today):
Unfortunately seems that the french are begging the Indians to buy 36 planes are per this article
France Wanted India To Announce Talks For 36 More Rafale Fighters
France Wanted India To Announce Talks For 36 More Rafale Fighters
Sources in the Defence Ministry told NDTV there is no immediate decision likely till the first tranche of Rafales start arriving in 2019.
All India| Written byVishnu Som|Updated: March 10, 2018 17:00 IST
The acquisition of the Rafale fighter jets for the Indian Air Force has been mired in controversy.
NEW DELHI:
HIGHLIGHTS
This was, however, not announcedin the joint statementmade by Prime Minister Narendra Modi and the visiting French President Emmanuel Macronin New Delhi todayand it's unclear at what stage the talks presently lie.
In her letter to Ms Sitharaman, Florence Parly wrote, "As written by the President of the French Republic to the Prime Minister of India on 25th October 2017, we would like to initiate discussions on the proposal of providing an additional thirty-six aircraft to the Indian Air Force, with a very significant share of Make in India." Ms Parly added, "A message to this effect during the visit would be particularly appreciated."
Senior sources in the Ministry of Defence Ministry whom NDTV spoke to in the days prior to the visit of the French President have said that while New Delhi has not ruled out a further acquisition of Rafale fighters, there is no immediate decision likely till the first tranche of Rafales, which are already on order, start arriving in 2019. These jets were ordered in 2016 in a controversialRs.58,000-crore government-to-government deal between India and France.
The joint statement by PM Modi and President Macron did not mention the talks for additional Rafales.
As far as the existing contract is concerned, "the construction of the aircraft intended for the Indian Air Force is progressing according to schedule" wrote Ms Parly in her letter. She added that France remains committed to fulfilling its offset commitments as part of the deal whereby manufacturing and other technology will be transferred to India as part of the overall deal worked out between both countries. "With regard to offsets, French companies are determined to establish long-term partnerships with public and private Indian companies. They have advanced. Thus, the Nagpur production unit should be able to manufacture the first components in spring."
India and France have also been trying to close out a deal to co-develop and refine India's indigenous jet fighter engine, the Kaveri, a project where the Defence Research and Development Organisation (DRDO) has been unable to meet project objectives. The Kaveri was meant to power India's Light Combat Aircraft Tejas which has, instead, had to rely on US manufactured General Electric GE-404 engines. Today's joint statement says ''the leaders noted ongoing discussions between DRDO and SAFRAN on combat aircraft engine and encouraged necessary measures and forward looking approaches to facilitate [an] early conclusion.''
The acquisition of Rafale fighter jets for the Indian Air Force has been one of the most controversial defence deals every signed by India. In a statement yesterday, the Congress party claimed that the Rafale tender had resulted in ''a staggering loss of Rs. 12,632 crore'' since ''India is clearly paying an extra price of Rs. 350.90 crore per aircraft'' compared to what Qatar and Egypt are paying for jets they have ordered from Dassault, the manufacturer of the Rafale. These claims have been vociferously countered in the past with Defence Minister Nirmala Sitharaman recently telling reporters, "Don't compare it (the Rafale deal) with Bofors. There is no scam here."
France Wanted India To Announce Talks For 36 More Rafale Fighters
France Wanted India To Announce Talks For 36 More Rafale Fighters
Sources in the Defence Ministry told NDTV there is no immediate decision likely till the first tranche of Rafales start arriving in 2019.
All India| Written byVishnu Som|Updated: March 10, 2018 17:00 IST
The acquisition of the Rafale fighter jets for the Indian Air Force has been mired in controversy.
NEW DELHI:
HIGHLIGHTS
- French defence minister wrote to Nirmala Sitharaman last month
- She wanted talks for more Rafales to be announced during Macron's visit
- Government sources say talks likely after first Rafales arrive next year
This was, however, not announcedin the joint statementmade by Prime Minister Narendra Modi and the visiting French President Emmanuel Macronin New Delhi todayand it's unclear at what stage the talks presently lie.
In her letter to Ms Sitharaman, Florence Parly wrote, "As written by the President of the French Republic to the Prime Minister of India on 25th October 2017, we would like to initiate discussions on the proposal of providing an additional thirty-six aircraft to the Indian Air Force, with a very significant share of Make in India." Ms Parly added, "A message to this effect during the visit would be particularly appreciated."
Senior sources in the Ministry of Defence Ministry whom NDTV spoke to in the days prior to the visit of the French President have said that while New Delhi has not ruled out a further acquisition of Rafale fighters, there is no immediate decision likely till the first tranche of Rafales, which are already on order, start arriving in 2019. These jets were ordered in 2016 in a controversialRs.58,000-crore government-to-government deal between India and France.
The joint statement by PM Modi and President Macron did not mention the talks for additional Rafales.
As far as the existing contract is concerned, "the construction of the aircraft intended for the Indian Air Force is progressing according to schedule" wrote Ms Parly in her letter. She added that France remains committed to fulfilling its offset commitments as part of the deal whereby manufacturing and other technology will be transferred to India as part of the overall deal worked out between both countries. "With regard to offsets, French companies are determined to establish long-term partnerships with public and private Indian companies. They have advanced. Thus, the Nagpur production unit should be able to manufacture the first components in spring."
India and France have also been trying to close out a deal to co-develop and refine India's indigenous jet fighter engine, the Kaveri, a project where the Defence Research and Development Organisation (DRDO) has been unable to meet project objectives. The Kaveri was meant to power India's Light Combat Aircraft Tejas which has, instead, had to rely on US manufactured General Electric GE-404 engines. Today's joint statement says ''the leaders noted ongoing discussions between DRDO and SAFRAN on combat aircraft engine and encouraged necessary measures and forward looking approaches to facilitate [an] early conclusion.''
The acquisition of Rafale fighter jets for the Indian Air Force has been one of the most controversial defence deals every signed by India. In a statement yesterday, the Congress party claimed that the Rafale tender had resulted in ''a staggering loss of Rs. 12,632 crore'' since ''India is clearly paying an extra price of Rs. 350.90 crore per aircraft'' compared to what Qatar and Egypt are paying for jets they have ordered from Dassault, the manufacturer of the Rafale. These claims have been vociferously countered in the past with Defence Minister Nirmala Sitharaman recently telling reporters, "Don't compare it (the Rafale deal) with Bofors. There is no scam here."
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Macron's engine offer for Tejas aimed at powering more Rafale sales
Joint statements on state visits tend to be drab in nature and point 10 of the joint statement after French President Emmanuel Macron's ongoing visit to India seems just as innocuous. But its content is of serious significance to the direction of India's defence strategies, which have long been criticised as convoluted.
It reads “Ongoing discussions between DRDO and SAFRAN on combat aircraft engine and encouraged necessary measures and forward looking approaches to facilitate early conclusion.” Safran, a major French defence and technology supplier, has been attempting to pitch its engine technology to India for more than a decade, in competition with its American and European rivals.
These attempts have been aimed at the DRDO's flagging Kaveri project, which aims to develop an engine for the Tejas fighter. In 2008, The Kaveri was officially 'de-linked' from the development of the Tejas, given numerous delays and performance shortfalls and a fresh batch of F404 engines were ordered from GE in the US.
GE also won a contract worth $822 million to supply a newer engine, the F414, for the Tejas' projected MK2 derivative; the first two of 99 F414 engines on order reached India in 2017. GE has also touted the F414 for India's future fifth-generation fighter, called the Advanced Medium Combat Aircraft (AMCA), which remains at concept stage.
However, work on the Kaveri project still continues. Ten days before Macron's visit, a French newspaper reported Safran was offering its M88 turbofan engine to India to revive the Kaveri project. The M88 powers the Rafale fighter, 36 of which are on order for India and which is at the centre of another political storm.
On the face of it, the French offer, valued at approximately euro 1 billion, seems to make eminent sense, in addition to providing a technology boost to DRDO.
The M88 is an advanced engine with a modular design, making maintenance easier and increasing operational availability, unlike Russian systems, which currently dominate Indian Air Force service. Furthermore, using a common engine type for the Rafale and Tejas would rationalise the Indian Air Force's vast and diverse logistics inventory, improving serviceability of aircraft while also lowering costs, as technicians and engineers would be dealing with common electronics, lubricants and other parts.
Pertinently, such an engine deal would also lead to cost amortisation for future Rafale orders—which the IAF has been keen on—and also give the French fighter an advantage in an ongoing Indian Navy competition to buy 57 aircraft.
However, embracing such an 'engine deal' should be done cautiously.
In its weight category, the M88 competes with the EUROJET consortium's EJ-200, which powers the Eurofighter Typhoon, and the F414; all three systems offer similar features.
The French engine has the disadvantage of lower order volumes compared with the other two, and consequently would have higher purchase costs. The F414 engine is regarded as having the lowest purchase cost of the three, as it is in service with the US Navy's Super Hornet fighter and has been ordered by South Korea and Sweden for their future fighter programmes, in addition to the Tejas MK2, as mentioned previously. With the US Navy and South Korea expected to use the F414 for decades, its 'growth' potential is considerable and the large order volumes would mean the engine would have a competitive price.
Another factor going against the French offer is how, or when, exactly an M88-powered Tejas will fructify would be difficult to envisage as the current set of 123 fighters intended for purchase by the IAF are powered by the American F404 engine. With development of the Tejas Mk2 proceeding slowly, modifying the fighter for a totally new engine is expected to lead to even more delays given the need for testing and possible design changes to its air intakes and fuselage.
An optimistic in-service date for such an M88-powered Tejas variant would be well past 2025, by when the type's basic design would be obsolete. While it can be argued that the M88 could be used for the AMCA, the level of IAF and government commitment to that programme remains unclear.
Therefore, it would be prudent to argue that deal to buy or co-develop Safran engines for the Tejas will help boost Rafale sales more than it would assist India's indigenous programmes.
Joint statements on state visits tend to be drab in nature and point 10 of the joint statement after French President Emmanuel Macron's ongoing visit to India seems just as innocuous. But its content is of serious significance to the direction of India's defence strategies, which have long been criticised as convoluted.
It reads “Ongoing discussions between DRDO and SAFRAN on combat aircraft engine and encouraged necessary measures and forward looking approaches to facilitate early conclusion.” Safran, a major French defence and technology supplier, has been attempting to pitch its engine technology to India for more than a decade, in competition with its American and European rivals.
These attempts have been aimed at the DRDO's flagging Kaveri project, which aims to develop an engine for the Tejas fighter. In 2008, The Kaveri was officially 'de-linked' from the development of the Tejas, given numerous delays and performance shortfalls and a fresh batch of F404 engines were ordered from GE in the US.
GE also won a contract worth $822 million to supply a newer engine, the F414, for the Tejas' projected MK2 derivative; the first two of 99 F414 engines on order reached India in 2017. GE has also touted the F414 for India's future fifth-generation fighter, called the Advanced Medium Combat Aircraft (AMCA), which remains at concept stage.
However, work on the Kaveri project still continues. Ten days before Macron's visit, a French newspaper reported Safran was offering its M88 turbofan engine to India to revive the Kaveri project. The M88 powers the Rafale fighter, 36 of which are on order for India and which is at the centre of another political storm.
On the face of it, the French offer, valued at approximately euro 1 billion, seems to make eminent sense, in addition to providing a technology boost to DRDO.
The M88 is an advanced engine with a modular design, making maintenance easier and increasing operational availability, unlike Russian systems, which currently dominate Indian Air Force service. Furthermore, using a common engine type for the Rafale and Tejas would rationalise the Indian Air Force's vast and diverse logistics inventory, improving serviceability of aircraft while also lowering costs, as technicians and engineers would be dealing with common electronics, lubricants and other parts.
Pertinently, such an engine deal would also lead to cost amortisation for future Rafale orders—which the IAF has been keen on—and also give the French fighter an advantage in an ongoing Indian Navy competition to buy 57 aircraft.
However, embracing such an 'engine deal' should be done cautiously.
In its weight category, the M88 competes with the EUROJET consortium's EJ-200, which powers the Eurofighter Typhoon, and the F414; all three systems offer similar features.
The French engine has the disadvantage of lower order volumes compared with the other two, and consequently would have higher purchase costs. The F414 engine is regarded as having the lowest purchase cost of the three, as it is in service with the US Navy's Super Hornet fighter and has been ordered by South Korea and Sweden for their future fighter programmes, in addition to the Tejas MK2, as mentioned previously. With the US Navy and South Korea expected to use the F414 for decades, its 'growth' potential is considerable and the large order volumes would mean the engine would have a competitive price.
Another factor going against the French offer is how, or when, exactly an M88-powered Tejas will fructify would be difficult to envisage as the current set of 123 fighters intended for purchase by the IAF are powered by the American F404 engine. With development of the Tejas Mk2 proceeding slowly, modifying the fighter for a totally new engine is expected to lead to even more delays given the need for testing and possible design changes to its air intakes and fuselage.
An optimistic in-service date for such an M88-powered Tejas variant would be well past 2025, by when the type's basic design would be obsolete. While it can be argued that the M88 could be used for the AMCA, the level of IAF and government commitment to that programme remains unclear.
Therefore, it would be prudent to argue that deal to buy or co-develop Safran engines for the Tejas will help boost Rafale sales more than it would assist India's indigenous programmes.
300+ LCA planes - 840 Engines approx.
840 x $5Mn (guestimate) - $4200 Mn
For 840 Engines, if the same number is used in Rafales - 150+ Rafales
Count more for AMCAs and possibly more other birds.
We are talking about a possible $10 Bn plus such military engines in fighter jets to be there in our own Indian ecosystem with maximum to Indian companies.
The question to ask - Will GE or EJ give core tech and all other subsystems to DRDO to licence produce under a JV and local ecosystem for Kaveri. Till date they have never even officially acknowledged that portion. Will thety accept a similar arrangement and make a newer version of kaveri reaching almost 125-130Kn AB? They wont even commit for it ever and change the yardstick whever possible.
Secondly, Safran also brings in the commercial Jet engines for our aviation industry. Will P&W, or other majors do the same?
Author should stop being myopic and only point Rafale. Rafly coming yes gets strengthened but the engine tech going into our fighter and commerical plane is far important. It makes us capable for a global MRO perspective as well. We are talking about multi Billion dollar business over decades. We dont get with others.
In fact, we should push for more components for Airbus for the deals under MII that we did for Indigo and Spicejet. The orders itself is humongous for A320 Neos from these airlines.
Whether Saffranised kaveri is used in Tejas Mk 2 or AMCA
is another matter or another question
Through the Rafale deal we are getting TOT for Engines from Safran
which we will never get from either US or Russia
Engine technology is the Final frontier for India And also China
Radars ; EW systems ; Weapons ; Airframe --- in all these domains we have
made a Good progress
I read somewhere that Hal makes engines for mki from raw materials. How would this deal be better than that?
@Aashish @randomradio
One thing I know is IPR rights.
Other thing discussed is its life hours is better than Russian engines.
We produce more than 85% of the AL-31FP in India. But this engine's IP is held by the Russians.
As for Saffranized Kaveri, we are yet to see how the ownership will happen. We may own 100% of the IP or we may have to pay some kind of royalty to the French. The former is the best. But even with the latter, it will still be better than license production of the AL-31FP.
With the Kaveri, we will be able to design bigger and better engines in the future. The AL-31FP's ToT doesn't provide that advantage.
This is cheating by French. Kaveri project upgrade was part of Offsets. Why must we pay French money for it? And if they want to use this engine for upgrade of Rafale. let them pay us.
They would have already reverse engineered the engine in 6 months - what they have done is slap on some parts from the M88 to show some weight savings and use the variable cycle tech for their next version of M88. This is like being robbed and then paying to get your robbed stuff back.
There's no cheating there. Offsets depends on the benefit to the company. Safran's contract with India wasn't in the billions for them to provide offsets worth euro 1B.
For 72 engines plus a handful of spare engines, even if you think the engines cost euro 8M or so, the total contract wouldn't be more than euro 700M. Half that would be 350M as offsets. And some of it is going into bringing the current K9 up to speed. Not to mention, we don't know how much of its going into production either.
Do you believe Modi and his negotiating teams to be complete morons?
Variable cycle tech is used on old M-53 (variable outlets within the engine) but nvm. Variable cycle notion can include many different techniques and mean many different things.
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hmm... in that case even the J58 was a variable cycle engine, a good 15-20 years before the M53.
Rafale G2G deal, pricing matter between governments of India, France: Dassault Aviation CEO
Eric Trappier, CEO, Dassault Aviation
In his most exhaustive interview yet on the Indo-French Rafale deal, Dassault Aviation CEO Eric Trappier, who is part of visiting French President Emmanuel Macron's trade delegation, talks to Executive Editor Sandeep Unnithan about the confidentiality clause within the contract and why the deal is a win-win for both countries.
Mr Trappier, what brings you to India?
I am here with the President to reinforce the partnership between India and France. I am also here to support the economic forum between the Indian and French industries. I head the French Aeronautical Association which is Dassault and 500 other companies.
We want to reinforce the partnership of French aerospace and Indian aerospace, so this is why I am here. And, obviously, I am here because we sold 36 Rafale and we are processing the performance of the contract to see that everything is going well. I am also here because we are supporting the Make in India policy as per the contract.
As you know, the last time I was in Nagpur (October 2017) to start our facilities part of our joint venture with Reliance. But it is not only this joint venture. We are also working in Bengaluru. We are working in Delhi, Mumbai, Pune and Hyderabad. We are still looking for new partners, not only us at Dassault. We are working with Rafale who are working in aerospace. So this process is underway. It is not only what we do in Nagpur (with Reliance).
I am happy in Nagpur because it is a city that is welcoming us with facilities and we have been able to discuss smart cities. Nagpur is going to become a smart city. So it is important for us to have this environment where we are going to set up these facilities starting with producing the Falcon in India.
Yesterday, your company released a document mentioning 7.4 billion Euros as the price for the Rafale deal.
What was despatched yesterday was an old document as company results in 2016. Those are the figures about our defence exports. And in defence exports, you have the Rafale deal. Just as the year before, in 2015, was the deal with Egypt and Qatar. But in this deal (2016), you also have the deal for the Mirage-2000, (upgrade of IAF's 47 Mirage-2000s signed in 2011) which we are supporting.
The figure you saw is not the figure for the Rafale but for the Rafale and the Mirage (upgrade). The deal was a Government to Government (G2G) deal between the governments of France and India. So the figures given at that time were checked by the government of France.
The price of the Rafale is about the same for every customer. What is different is the scope of the contract, the number of aircrafts, the definition of the aircraft, the bases, the type of support you are buying, and the support and spares.
I can confirm to you that the contract for India is different from the contract for the government of Egypt which is different from the government of Qatar. So there is no comparision of the price. The contracts are different in terms of scope but the price of the aircraft remains the same.
We don't understand the problem. We don't mind so much about it. We mind how our customer, the Ministry of Defence and the Indian Air Force are talking to us. And we are in confidence. But with the Indian Air Force, and we are honored and proud to be chosen by the Indian Air Force, officially, two times -- one was the winner of the 126 contract and the second one was when the Indian government decided to proceed with the 36 deal. So everybody is convinced that it is the best aircraft for India. The pricing is a matter of the French government to the Indian government, G2G.
Are you saying that because it was a G2G deal, there have been certain additions to the price, other ancillary and other details?
This is our pricing. In the pricing that we are performing for India, it is roughly the same for Egypt and Qatar.
Then why the confidentiality around the price?
Most of the time, defence deals are confidential in order to not give the price to our competitors and it is the responsibility of the government which is buying the fighters to say whether it wants it to be confidential or not. Both governments have said it is confidential.
Has there been any change in the price of the aircraft?
The order came into our book in 2016. So we had to say "our figure for 2016, as a financial asset, takes into account the order for India". But we are not saying the order for India is worth 7.9 (billion Euros). We are despatching the book of our finances to the market. It is a market obligation. So I am the only one who knows how much it is with the Mirage, how much for the Rafale, and we do not disclose this information. Not to India, not to the public. This is part of the company.
There is talk of a deal for additional Rafales, between 36 and 90. Is this just speculation?
At this stage, I don't know. We are working on the first of the 36. We are working to show that the Rafale is meeting the requirements of the Indian Air Force while at the same time, we are setting up the facilities to prepare for more orders. But that will be later on. We hope that but it is not any deal under preparation at this stage.
Has the IAF shown any interest for additional Rafales?
I think that any Air Force in the world wants more fighters. It is the responsibility of the government to say what is the operational requirement of the Armed Forces and what should be the budget available and then take the decision. It is the same everywhere in the world.
You have an inquiry for the Indian Navy's order for 57 carrier-based fighter aircraft.
Yes, there is an RFI. We are obviously a candidate and we are very serious about it. We feel that we may fit the requirement of the Indian Navy, the existing one as well as the one under construction (IAC-1, Vikrant). As you know, the Rafale has been designed from scratch to be a fighter for the Navy as well as for the Air Force. I am sure it is one of the only aircrafts worldwide which can fulfil all missions-air force, navy, air defence, strike etc.
The MoD released a statement last month -- February 8, to be precise -- where they said they had not received the offset partner. Whereas the Congress party says that the deal has been done to satisfy a certain industrial house, namely Reliance. Who is correct?
We are working step by step. We have an association with Reliance for Nagpur and as I said, the Nagpur facility seems to be very well because we have the land available, transportation capabilities in Nagpur, an airport, subways in the city. It is going to be a smart city so the economic environment is going to be good.
It is going to be less busy than other cities as Dassault, for our Falcon, we have selected Reliance. It is our offset partner. But it is not the only one. At the same time, we will submit a file to say 'these are our offset partners' and these are our candidates for offsets. So we are not only with this company (Reliance). We are partnering with many other companies. For example, the engine we are partnering with HAL in Bengaluru. Electronics will be mainly in Delhi with Samtel. With BEL electronics in Hyderabad, we have the display systems; we have tools. We will sub-contract tools to many companies which are in India.
Part of the joint venture is to have a 'win-win'. We will have another type of 'win-win' but others also will be filled with some work, provided they are good. As you know that offsets take time and we have some time. So the selection is not over. We are working and this is why I am leading this mission next month in order to enlarge the capability of our association between SMEs. I am also going to work with Indian SMEs.
This offset proposal has to be submitted to the MoD?
Yes, step-by-step. We are informing the MoD step by step.
Have you started the process?
Yes.
The fact that the Nagpur (Reliance) facility is your offset partner has been given to the MoD?
Yes yes, it is our choice at Dassault. This is the rules of the offset. There are some rules for offsets that the work they are doing can be elected as offsets but the choice is ours. So the choice of Reliance, the choice of HAL, the choice of maybe Larsen and Toubro in some activities, some others, it is going to be a very large panel of companies which are going to be involved in this deal.
There is a component within the Rafale contract for reviving the indigenous Kaveri engine programme. At what stage is this at?
I cannot comment because at this stage, discussions are going on. We are supporting it. Safran is part of the Rafale team. That would give work to Indian agencies as well as Indian industries to support Dassault. The integration for the new engine, which will be seleted by the Indian side, is a good project but the contract is not yet decided.
What role does Dassault have in the engine programme?
We have the design know-how. We will support the integration of this new engine in this new aircraft. The main actor in this, of course, is Safran which has the capability to design engines like they did with our M88 engine that is fitted on our Rafale. It is a big deal if they will join with Indian agencies or the Indian industry to develop an engine. There is a need.
There's a certain sense of disappointment in the French ministry. Lot of deals stuck for 8-10 years.
This is why I am happy and this is the reason some others are not. As far as I am concerned, Dassault has work to do. A lot of work to do, not only to satisfy the requirements of Dassault but to set up the facilities (base infrastructure). I think the key is setting up the facilities in the long term. We need to transform our long-term offset obligations into a Make in India-long term commitment between the two companies. One French company and one Indian company could share certain assets together to develop the company together for mutual benefit.
There is a perception that French equipment is as good as, if not better, than US equipment. It is very expensive.
No, I think it is something that the Americans would like it to be. If you compare Apple to Apple, you do not compare the Rafale with the F-16. The Rafale is better than the F-16. You also have to take into account the ratio of the US-Euro exchange rates. Sometimes it is high. Sometimes it is low. You have to be careful how to compare that. If you take, for example, the price of an F-18 or the price of an F-35, it is more expensive than a Rafale, even if they are not capable of all types of mission.
If, for example, you want to go on a modern aircraft carrier, you need to take a V/STOL version. If you want air defence, you have to take another aircraft, that is the F-22. So F-35 was not designed for air defence. So that's two aircrafts -- the F-22 and the F-35. The Rafale does both roles. So I am not sure whether sophistication is more expensive. We have been able to make an aircraft which is not so bigger than the Mirage but capable of all types of missions.
Rafale G2G deal, pricing matter between governments of India, France: Dassault Aviation CEO
Eric Trappier, CEO, Dassault Aviation
In his most exhaustive interview yet on the Indo-French Rafale deal, Dassault Aviation CEO Eric Trappier, who is part of visiting French President Emmanuel Macron's trade delegation, talks to Executive Editor Sandeep Unnithan about the confidentiality clause within the contract and why the deal is a win-win for both countries.
Mr Trappier, what brings you to India?
I am here with the President to reinforce the partnership between India and France. I am also here to support the economic forum between the Indian and French industries. I head the French Aeronautical Association which is Dassault and 500 other companies.
We want to reinforce the partnership of French aerospace and Indian aerospace, so this is why I am here. And, obviously, I am here because we sold 36 Rafale and we are processing the performance of the contract to see that everything is going well. I am also here because we are supporting the Make in India policy as per the contract.
As you know, the last time I was in Nagpur (October 2017) to start our facilities part of our joint venture with Reliance. But it is not only this joint venture. We are also working in Bengaluru. We are working in Delhi, Mumbai, Pune and Hyderabad. We are still looking for new partners, not only us at Dassault. We are working with Rafale who are working in aerospace. So this process is underway. It is not only what we do in Nagpur (with Reliance).
I am happy in Nagpur because it is a city that is welcoming us with facilities and we have been able to discuss smart cities. Nagpur is going to become a smart city. So it is important for us to have this environment where we are going to set up these facilities starting with producing the Falcon in India.
Yesterday, your company released a document mentioning 7.4 billion Euros as the price for the Rafale deal.
What was despatched yesterday was an old document as company results in 2016. Those are the figures about our defence exports. And in defence exports, you have the Rafale deal. Just as the year before, in 2015, was the deal with Egypt and Qatar. But in this deal (2016), you also have the deal for the Mirage-2000, (upgrade of IAF's 47 Mirage-2000s signed in 2011) which we are supporting.
The figure you saw is not the figure for the Rafale but for the Rafale and the Mirage (upgrade). The deal was a Government to Government (G2G) deal between the governments of France and India. So the figures given at that time were checked by the government of France.
The price of the Rafale is about the same for every customer. What is different is the scope of the contract, the number of aircrafts, the definition of the aircraft, the bases, the type of support you are buying, and the support and spares.
I can confirm to you that the contract for India is different from the contract for the government of Egypt which is different from the government of Qatar. So there is no comparision of the price. The contracts are different in terms of scope but the price of the aircraft remains the same.
We don't understand the problem. We don't mind so much about it. We mind how our customer, the Ministry of Defence and the Indian Air Force are talking to us. And we are in confidence. But with the Indian Air Force, and we are honored and proud to be chosen by the Indian Air Force, officially, two times -- one was the winner of the 126 contract and the second one was when the Indian government decided to proceed with the 36 deal. So everybody is convinced that it is the best aircraft for India. The pricing is a matter of the French government to the Indian government, G2G.
Are you saying that because it was a G2G deal, there have been certain additions to the price, other ancillary and other details?
This is our pricing. In the pricing that we are performing for India, it is roughly the same for Egypt and Qatar.
Then why the confidentiality around the price?
Most of the time, defence deals are confidential in order to not give the price to our competitors and it is the responsibility of the government which is buying the fighters to say whether it wants it to be confidential or not. Both governments have said it is confidential.
Has there been any change in the price of the aircraft?
The order came into our book in 2016. So we had to say "our figure for 2016, as a financial asset, takes into account the order for India". But we are not saying the order for India is worth 7.9 (billion Euros). We are despatching the book of our finances to the market. It is a market obligation. So I am the only one who knows how much it is with the Mirage, how much for the Rafale, and we do not disclose this information. Not to India, not to the public. This is part of the company.
There is talk of a deal for additional Rafales, between 36 and 90. Is this just speculation?
At this stage, I don't know. We are working on the first of the 36. We are working to show that the Rafale is meeting the requirements of the Indian Air Force while at the same time, we are setting up the facilities to prepare for more orders. But that will be later on. We hope that but it is not any deal under preparation at this stage.
Has the IAF shown any interest for additional Rafales?
I think that any Air Force in the world wants more fighters. It is the responsibility of the government to say what is the operational requirement of the Armed Forces and what should be the budget available and then take the decision. It is the same everywhere in the world.
You have an inquiry for the Indian Navy's order for 57 carrier-based fighter aircraft.
Yes, there is an RFI. We are obviously a candidate and we are very serious about it. We feel that we may fit the requirement of the Indian Navy, the existing one as well as the one under construction (IAC-1, Vikrant). As you know, the Rafale has been designed from scratch to be a fighter for the Navy as well as for the Air Force. I am sure it is one of the only aircrafts worldwide which can fulfil all missions-air force, navy, air defence, strike etc.
The MoD released a statement last month -- February 8, to be precise -- where they said they had not received the offset partner. Whereas the Congress party says that the deal has been done to satisfy a certain industrial house, namely Reliance. Who is correct?
We are working step by step. We have an association with Reliance for Nagpur and as I said, the Nagpur facility seems to be very well because we have the land available, transportation capabilities in Nagpur, an airport, subways in the city. It is going to be a smart city so the economic environment is going to be good.
It is going to be less busy than other cities as Dassault, for our Falcon, we have selected Reliance. It is our offset partner. But it is not the only one. At the same time, we will submit a file to say 'these are our offset partners' and these are our candidates for offsets. So we are not only with this company (Reliance). We are partnering with many other companies. For example, the engine we are partnering with HAL in Bengaluru. Electronics will be mainly in Delhi with Samtel. With BEL electronics in Hyderabad, we have the display systems; we have tools. We will sub-contract tools to many companies which are in India.
Part of the joint venture is to have a 'win-win'. We will have another type of 'win-win' but others also will be filled with some work, provided they are good. As you know that offsets take time and we have some time. So the selection is not over. We are working and this is why I am leading this mission next month in order to enlarge the capability of our association between SMEs. I am also going to work with Indian SMEs.
This offset proposal has to be submitted to the MoD?
Yes, step-by-step. We are informing the MoD step by step.
Have you started the process?
Yes.
The fact that the Nagpur (Reliance) facility is your offset partner has been given to the MoD?
Yes yes, it is our choice at Dassault. This is the rules of the offset. There are some rules for offsets that the work they are doing can be elected as offsets but the choice is ours. So the choice of Reliance, the choice of HAL, the choice of maybe Larsen and Toubro in some activities, some others, it is going to be a very large panel of companies which are going to be involved in this deal.
There is a component within the Rafale contract for reviving the indigenous Kaveri engine programme. At what stage is this at?
I cannot comment because at this stage, discussions are going on. We are supporting it. Safran is part of the Rafale team. That would give work to Indian agencies as well as Indian industries to support Dassault. The integration for the new engine, which will be seleted by the Indian side, is a good project but the contract is not yet decided.
What role does Dassault have in the engine programme?
We have the design know-how. We will support the integration of this new engine in this new aircraft. The main actor in this, of course, is Safran which has the capability to design engines like they did with our M88 engine that is fitted on our Rafale. It is a big deal if they will join with Indian agencies or the Indian industry to develop an engine. There is a need.
There's a certain sense of disappointment in the French ministry. Lot of deals stuck for 8-10 years.
This is why I am happy and this is the reason some others are not. As far as I am concerned, Dassault has work to do. A lot of work to do, not only to satisfy the requirements of Dassault but to set up the facilities (base infrastructure). I think the key is setting up the facilities in the long term. We need to transform our long-term offset obligations into a Make in India-long term commitment between the two companies. One French company and one Indian company could share certain assets together to develop the company together for mutual benefit.
There is a perception that French equipment is as good as, if not better, than US equipment. It is very expensive.
No, I think it is something that the Americans would like it to be. If you compare Apple to Apple, you do not compare the Rafale with the F-16. The Rafale is better than the F-16. You also have to take into account the ratio of the US-Euro exchange rates. Sometimes it is high. Sometimes it is low. You have to be careful how to compare that. If you take, for example, the price of an F-18 or the price of an F-35, it is more expensive than a Rafale, even if they are not capable of all types of mission.
If, for example, you want to go on a modern aircraft carrier, you need to take a V/STOL version. If you want air defence, you have to take another aircraft, that is the F-22. So F-35 was not designed for air defence. So that's two aircrafts -- the F-22 and the F-35. The Rafale does both roles. So I am not sure whether sophistication is more expensive. We have been able to make an aircraft which is not so bigger than the Mirage but capable of all types of missions.
Rafale G2G deal, pricing matter between governments of India, France: Dassault Aviation CEO