Rafale Deal Decodified

The need for new aircraft by IAF was first felt in 2001 when IAF requested for upgrades to MIRAGE 2000, but since France was stopping the production line, the plan could not be met. Further, the MMRCA plan was initiated in 2004 with RFI for 126 aircraft and RFP launched in 2007 for the same. The initial estimate was provided in the range of $10.2 billion at 2007 exchange rate in which 18 aircraft were to be in fly-away condition and rest 108 were to be assembled by HAL. After the evaluation of technical bids, only 2 manufactures remained namely Dassault Rafale and Typhoon Eurofighter which after evaluation of total costs Dassault Rafale was selected as the winner. However, Dassault and Indian Government could not agree on pricing issues due to GoI instance that it takes responsibility for quality standards of Rafale made by HAL and also stick to the delivery schedule with which Dassault was not at all comfortable of doing so due to operational constraints of HAL. Meanwhile, the initial price of € 79.8 million was rising each year due to 3.9% escalation cost and reached € 112.6 million in 2016. This price was deemed too high and subsequently, the decision was taken to buy only 36 aircraft in flyaway condition of France at 2011 price. However, while the 2011 deal was only for base aircraft the deal inked in 2016 included the cost of 36 Rafales with 2 simulators, meteors, and scalp missiles, training of crews while also responsible for ensuring free spares for 5 years and integration of Israeli systems as per Indian standards. Taking all this into account the 2016 deal was much more effective and cost-efficient than 2011 deal as India has had the bad experience with spares in case of Sukhoi aircraft from Russia. This deal thus saved around € 24 million per aircraft which is similar to the cost of 1 Tejas Mk1.