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THE CHOWKIDAR'S FRENCH BHAGIDARI - Part 1

By Varun Hari Prasad

Defence procurement has always been a matter of controversy in India. Starting from the Jeep purchase in the 1960s to Bofors to VVIP Helicopters (Augusta Westland); the Rafale is no exception.

But what is it that makes this ‘deal’ more controversial than others? Why is the Prime Minister, Mr Narendra Modi being called a ‘chor’? I propose to answer to these questions in two parts. In the first part I will only place before you the features of the ‘deal’ under the UPA and NDA Governments.

The Rafale Deal under UPA Government


As per the requirements specified by the Indian Air Force (IAF), the UPA Government issued a Request For Proposal (RFP) on 28th August 2007 for 126 Medium Multi-Role Combat Aircrafts (MMRCA). This RFP was issued to six vendors and it was made clear that the bids were to be inclusive of cost of initial purchase (including that of weapons and missiles), cost of transfer of technology, licence royalty for manufacture in India and cost of initial training.

After receiving the bids, the Indian Air Force conducted field trials and conveyed to the Ministry of Defence in 2011 that Dassault’s Rafale and Eurofighter GmbH’s Typhoon fighters met the requirements of the Air Force. Once the commercial bids were opened (in 2012), it was found that Dassault’s bid was the lowest and the Ministry of Defence began negotiations with Dassault. By early 2014, the deal envisaged was as follows:


  1.        126 aircrafts would be purchased, out of which 18 were to bough in ‘fly-away’ condition and the remaining 108 would be manufactured in India by HAL under Transfer of Technology.
  2.       At the time of floating the RFP the estimated cost for procurement of 126 aircraft was placed at 42,000 crore with an escalation cost of 10% every year.  

   This deal was not inked due to the ensuing general elections and it was left for the next Government to decide. In the 2014 elections the UPA Government was voted out and Mr Modi became the new Prime Minister.



The Rafale Contract under Modi Government

After the new Government assumed office, on 4th July 2014, the Eurofighter wrote to the then Defence Minister Mr Arun Jaitley offering to reduce 20% of the cost it had initially quoted. At the same time, negotiations with Dassault continued and in March 2015 it reached the penultimate state.

At a Press briefing in France on 25th March 2015, the CEO of Dassault Mr Eric Trappier said: “You can imagine my satisfaction to hear.... from the HAL Chairman, that we are in agreement for responsibilities sharing, considering as well our conformity with the RFP in order to be in line with the rules of this competition. I strongly believe that contract finalisation and signature would come soon”. 

Later on 8 April 2015, Foreign Secretary S Jaishankar, while briefing the media regarding the Prime Minister's visit to France had this to say when asked about Rafale:
"In terms of Rafale, my understanding is that there are discussions under way between the French company, our Ministry of Defence, the HAL which is involved in this. These are ongoing discussions. These are very technical, detailed discussions. We do not mix up leadership level visits with deep details of ongoing defence contracts. That is on a different track. A leadership visit usually looks at big picture issues even in the security field."

Just two days after the Foreign Secretary's statement, PM Modi announced an  Inter-Government deal for purchase of 36 Rafale aircraft in 'fly-away' condition. 

This is the broad history of the UPA and the NDA deal. Now coming to the questions I raised at the begining of this essay: How are these deals different and why is Mr Modi called a 'Chor'? We'll deal with this in the next part.

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