Channel: Editor's Viewpoint

  • What will it take to win the Indian MMRCA jet deal?

    By Sanmit Ahuja On 24 May 2011

The French Defence Minister Gerard Longuet just visited Delhi to further impress upon the Indian Government that the “Rafale”, which is one of the shortlisted contender for the USD 11bn MMRCA jet fighter procurement deal, is the best candidate for the job. It is not a co-incidence that Christine Lagarde, the French Finance Minister and a contender for the top IMF job, is also in Delhi at the same time to seek support from PM Manmohan Singh who along with his counterparts from the other BRICS economies voiced a written concern.

Clearly the race for the MMRCA deal is hotting up as the negotiations enter the final phase expected to last 1-3 months. The other shortlisted candidate is the EADS Eurofighter Typhoon, developed by a 4 country consortium including Germany, Italy, Spain and the UK. To fight its case, the German Chancellor Angela Merkel is leading a large delegation of German Ministries including Ministry of Defence.

The body language of both these camps will change dramatically going forward. They will indulge in extensive mollycoddling, lobbying and read carefully into the body language of Indian Ministry of Defence officials and every single word that is uttered from New Delhi.

We cannot accurately predict on who will win the jet fighter deal, but can say a word or two on what the two consortia need to be offering in order to swing the deal in their favour.

Firstly, the new and resurgent India is extremely confident and not afraid of showing the exit door to any company regardless of how important the relationship with their country may be. It recently did this to both the Russians, who till date are the largest suppliers of arms to India, and the Americans whose Lockheed Martin and Boeing were rejected in their respective offerings of F-16IN and F-18 Super Hornet. The Russians may not be all that surprised by the decision but it did bring to the Americans a rude awakening. New Delhi claims that the fighter jets will be evaluated on the technical and procurement priorities than geo-political leanings. So neither the French and nor the four member countries of the Eurofighter EADS consortium should take matters for granted. But if it does back the latter, India will win the supreme confidence of four European member nations, as opposed to just one which is France in case it picks the Rafale. The tide turns in favour of EADS in this particular case.

The one aspect of geo-politics that will have a material impact on the outcome of the deal is which of the two companies that are currently in the fray, actively engages in supplying weaponry to Pakistan. The outright rejection of F-16 by the Indian Government could be due to the fact that the Pakistani Airforce also flies that particular aircraft. The French have been snubbed by Delhi in their arms relations with India’s neighbour. New Delhi perhaps wants to be sure that it doesn’t end up buying any equipment or technology which is also then sold to its neighbour with which it has locked horns for decades.

The second important component of the deal is technology platform that is on offer. Both Boeing and Lockheed Martin were well aware of the fact that they were offering antiquated (but rather spruced up) versions of their fighter jets. The Russians have been doing that for a very long time. This time around the Indian Ministry of Defence is very clear that it doesn’t end up spending a fortune on buying archaic platforms which have a much higher total cost of ownership than what is printed on the label. All eyes are on what is known as “AESA” in the defence circles. AESA stands for Active Electronically Scanned Array, or in simple terms a highly sophisticated radar that as high radio-jamming resistance level, interacts in multiple frequencies and has tremendous stealth like capabilities. The Rafale comes with an AESA radar giving it an edge over Eurofighter who are proposing to develop it jointly with the Indians. Other issues that play to Rafale’s advantage is a simpler supply chain with most of its parts procured from a single nation as opposed to over 20 in case of the Eurofighter.

The third and perhaps the most crucial point which ultimately could be the winner for either of the party is what they do with the offset requirement which is 50 per cent in this case. Majority of the fighters will be assembled and contract manufactured within India. The company that is able to demonstrate its ability and desire to genuinely help India develop a defence and hi-tech manufacturing eco-system is likely to win a lot of brownie points and the mega bucks that come with the fighter deal.

If the last point is to be taken seriously and implemented properly, for once such a large procurement will actually deliver immense value for money to the Indian Defence forces, unlike many other cases where money has been squandered much like what it procured.

The time of reckoning is near and will provide an interesting spectacle to geo-political and defence analysts.

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