France’s Dassault Aviationwill soon initiate moves to identify Indian partners, notably private sector firms, to eventually make its Rafale aircraft in the country as the government looks to freeze the process to finalise terms to consummate the first tranche of the deal for the supply of 36 jets to Indian Air Force.
India and France plan to set up a committee comprising representatives from both sides whose job will be to firm up a joint agreement to operationalise the deal, struck last month by PM Narendra Modiduring his state visit to France, in the next few months. The panel’s constitution is likely to be announced during the visit of French Defence Minister Jean-Yves Le Drian on Wednesday.
Sources said that instructions to the joint committee will be to conclude final negotiations for the contract by the end of July so that a formal contract is signed at the earliest and the two-year deadline for the delivery of fighters is met.
In a seemingly parallel move, Dassault will also soon begin the process of selecting Indian partners, mostly from the private sector, for the mega contract. Officials said India will lean on the French side to set up joint ventures with private firms, under the new ‘directed offsets’ policy that is being formulated. The Rafale fighters are jointly produced by a bunch of French firms led by Dassault and including Thales and Snecma.
Among the local firms being considered, sources on the French side say, are Tata Advanced Systems Limited, Dynamatics, Taneja Aerospace, L&T and Reliance Defence Systems. Some of these firms were already partners for the old Rafale deal that was announced during the UPA era but has since been scrapped by the Modi government.
Last month, ET had reported citing sources that the government may ask France’s Dassault Aviation to rope in an Indian partner to jointly manufacture the next batch of its Rafale fighters in the country. This, the sources said, was likely to be a condition for landing the remainder of the contract.However, French sources say clarity was still awaited on how the Indian side wants the contract to be executed and a firm list of partners will be drawn up after a meeting between the two defence ministers on Wednesday.
With the government clear that state-run Hindustan Aeronautics Ltd (HAL), Dassault’s Indian partner under the old deal, is overbooked and cannot handle the Rafale project on its own, several Indian firms are expected to be in contention to be part of the expected larger program to manufacture the jets in the country under the government’s Make in India initiative. The initial order of 36 fighters is expected to cost more than $7 billion.
While a large part of the initial investments by Dassault in India will be done to set up maintenance facilities with the Air Force as part of its base repair depots, partners will be needed by the French company for the larger plan to manufacture the jets in India for an expanded order.
Meanwhile, the Indian order appears to be a lucky one for the French aircraft maker.
On Monday it won a contract for 24 Rafale fighters for an estimated $7 billion from Qatar, swelling its export order book for the planes to 84. Qatar also has an option to buy 12 more fighters as part of the contract. Dassault has won a similar deal for 24 planes fromEgypt. Its swelling order book, experts say, bodes well for shifting a part of the manufacturing process of the fighters to India, making it financially viable.
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