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Russia Angles to Snatch $20Bln Indian Fighter Jet Deal From France

Russia may be leveraging India’s anger at French aerospace
firm Dassault
to kill a $20 billion aircraft deal, after allegations
that the company seriously misled New Delhi on pricing its Rafale
fighter jets.

After three years in limbo, Indian newspaper Business
Standard reported on Monday that India’s defense ministry now considers
the contract “essentially dead.” 

Moscow lost out on the contract in 2012, when India chose
Dassault’s Rafale fighters over Russia’s MiG-35 multi-role aircraft.
With tensions between Russia and France high following Paris’ decision
last year to delay the delivery of two Mistral-class warships over
conflict in Ukraine, analysts said that politics may have played a role
in the demise of the French aerospace deal. 

“Obviously, Russia is working to kill the French contract
and they are [attacking] from all directions,” Ruslan Pukhov, director
of the Moscow-based Center for the Analysis of Strategy and Technology,
a defense industry think tank, told The Moscow Times by phone on Monday.

But Petr Topychkanov, a military expert at the Carnegie
Moscow Center, said that although Russia may be influencing India’s
position, “it does not mean that Russia will automatically get
the deal,” as the U.S. aerospace industry is also aggressively targeting
the Indian market.

A Massive Tender

India’s air force is aging, but New Delhi’s strategic
ambitions in Southeast Asia are rising. With its aging fleet
of Soviet-era MiG-21 fighter jets fast approaching retirement, India’s
defense ministry announced a $10 billion tender for 126 foreign fighter
jets in 2007.

One of the largest fighter jet tenders in history, India’s
call drew the attention of some of the world’s largest aircraft
manufacturers — such as France’s Dassault, the U.S. behemoths Boeing
and Lockheed Martin, and Russia’s RSK MiG.

In 2012, India named Dassault the winner of the tender,
which called for the localized production of all but 18 of the 126
aircraft under the arm of India’s largest aerospace firm, Hindustan
Aeronautics Limited (HAL). Rafales were chosen in part because they were
thought to be cheaper to produce and operate than other options.

But Dassault based its bid on incomplete pricing information
that did not take into account the cost of outfitting and operating
the fighters over their entire operational lifetime.

Over the course of three years of negotiations, the value
of the contract has since swollen to $20 billion, and is now threatened
by allegations surfacing in the Indian press that Dassault intentionally
misled the defense ministry over the price.  

Canceling the deal with France would be a reasonable next step, said Topychkanov,

“[Dassault] has not demonstrated any progress, and for India
this deal was extremely important for the innovation of their aerospace
industry — they cannot wait for years to get new warplanes.”

Neither Dassault nor the Indian defense ministry could be reached for contact by The Moscow Times.

 

Russian Stopgap

Russia’s RSK MiG, designer of some of the country’s most
famous fighter jets, was one of the major aerospace firms to bid
for India’s $10 billion tender back in 2007.

At the time, it proposed that India purchase its MiG-35
multi-role fighter,
an aircraft that was and still is stuck
in development. India’s military leaders expressed little interest
in the deal, though, as their tender required a fighter that had already
proven itself and was in serial production.

Still, India’s need for capable fighters in the near-term
may open a window of opportunity to sell them Russia’s long-produced
Sukhoi Su-30.

According to Pukhov, “the longer they continue to postpone
their decision on [Rafale], the more they need something to bridge
the gap. That something is more batches of the Su-30.”

India is familiar with the aircraft, having over 200 Su-30s already in service.  

New Delhi so far appears to be responding favorably to Russian pressures to buy the Su-30.

In December, Manohar Parrikar, India’s defense minister,
said that negotiations with Dassault had run into unspecified
complications, and that “[Russia’s] Sukhoi Su-30MKI is an adequate
aircraft for meeting the air force’s needs.”

Russia’s Irkut Corporation, a subsidiary of the United
Aircraft Corporation and the manufacturer of Sukhoi’s Su-30, announced
its intention to present a prospective modernization program for India’s
Su-30 fleet at the opening of the Aero India 2015 air show
on Wednesday, the TASS news agency reported Monday.

Western Competition

A Russia-India joint project to develop a next-generation fighter aircraft, the Sukhoi PAK FA, may complicate Russia’s bid.

“The fact is that India is no longer willing to give all
of the expensive arms contracts to one single supplier,” Topychkanov
said.

Because of its engagement on the PAK FA project, India is
more likely to favor bids for replacing the Dassault contract from U.S.
Aerospace giants Boeing and Lockheed Martin — who offered up their
F/A-18 Super Hornet and F-16 Falcon, respectively.

The United States also last year overtook Russia as India’s
number one arms supplier, and U.S. President Barack Obama and Indian
Prime Minister Narendra Modi recently negotiated a sweeping
military-industrial cooperation agreement that is due to be signed later
this year — a development that Carnegie’s Topychkanov says heralds even
greater arms trade between India and the United States.

Pukhov noted, though, that India may eventually use
the fighter jets to counter regional adversary Pakistan — a U.S. ally.
If India were to attack Pakistan with U.S. jets, there is
the possibility that Washington might refuse to supply spare parts,
making the United States unlikely to receive the contract, he said. 
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