French fighter jet deal: An Indian saga – Berita Daily
NEW DELHI (India): The less-than-supersonic sale of French Rafale fighter jets to India has highlighted the obstacles facing foreign arms firms looking to go with the world’s biggest weapons importer.
India has signed a number of key defence deals under Prime Minister Narendra Modi during a US$100 billion upgrade of that Soviet-era military hardware, which makes it an attractive proposition for arms exporters.
But many corruption scandals make India a difficult environment, with huge delays plus a tough negotiation process.
After nearly ten years of discussions and setbacks India signed an offer Friday to buy 36 Rafale fighter jets for 7.9 billion euros (US$8.8 billion) mainly because it seeks to bolster its military against a progressively assertive China.
Defence experts repeat the aircraft, manufactured by France’s Dassault, provides a significantly needed boost to India’s air force.
But the next windfall was significantly less than was wanted through the French.
“The Indians always conduct very tough negotiations. They may be noted for it,” said Isabelle Saint-Mezard, an authority in South Asian strategic issues with the University of Paris.
“They’ve most of the weapons suppliers knocking inside their door, so that they are very well positioned to take action.”
Eric Trappier, CEO of Dassault Aviation, has gained example of India’s bargaining tactics nowadays.
“India may be a school of patience,” he explained.
The country ranks 130 out of 189 about the World Bank’s Easy Doing Business index — the for the worst situation G20 countries — and regulations vary capriciously across its 29 states, where perhaps the same law could be interpreted in bafflingly alternative ways.
Fear of corruption
Allegations of corruption have scuppered Indian defence deals as far back as 1987, when then-prime minister Rajiv Gandhi’s government collapsed over charges of kickbacks paid to Indian officials because of the Swedish group Bofors to clinch a US$1.3-billion artillery deal.
Fears of further corruption meant that “the modernisation from the armed forces stalled,” said Gulshan Luthra from the Institute for Defence Studies and Analyses in New Delhi.
To erect safeguards against graft India ramped up its army of bureaucrats addressing weapons sales, with contracts becoming trapped in a paper maze.
The smallest inquire into an arms deal required originating from a government department can delay a suit for a number of months.
“These days, the authorities have aimed to clamp down on graft. For that reason, officials accountable for issuing contracts fear exposing themselves to suspicion of corruption and so are hesitant to engage,” said St. Mezard.
For a partnership to have success, “it usually takes strong political will along at the highest level of the state run,” she added.
But almost all these precautions usually do not prevent old demons resurfacing.
In 2013 the govt scrapped a $748 million contract with AgustaWestland helicopters following allegations that it was won through kickbacks.
Deals can also be complicated because India is decided to obtain its goal of being less reliant on foreign trade for its military equipment. Its tenders are associated with significant technology transfer requests.
For example, one mooted deal ended up can see Dassault assemble 108 away from 126 fighter jets on Indian soil.
But in france they refused to assume responsibility for all of the planes who were to generally be internal India.
“The Indians refer to such deals, but without always getting the means or even the expertise to handle them out. For that reason, suppliers are often begin this type of agreement,” said St. Mezard.
Faced having an urgent need to modernise its military, Modi’s government finally decided on the direct sale of 36 ready-to-fly Rafale jets, which will be produced in France.
But Dassault will probably be contractually absolute to reinvest up to 50 % with the worth of the offer in India, an obligation referred to as offset clause.
“The offset rules are extremely complicated and opaque,” said Rahul Bedi, a Jane’s Defence Weekly analyst. “We’re also talking high-tech and the Indian industry doesn’t have the sophistication to absorb such offsets.”
India has signed several big-ticket deals since Hindu nationalist Modi took power in 2014.
The increasing assertiveness of that giant neighbour China as well as its simmering rivalry with Pakistan have risen its must upgrade its military.
That signals many potential contracts for foreign arms suppliers — regardless of the obstacles.