Why India Purchased Rafale Fighter Jets from France but Failed to Transfer the Technology?
In 2016, New Delhi signed an agreement with French Dassault Aviation for the sale of 36 Rafale fighter jets worth $ 9.2 billion. It was then decided to purchase 26 more Rafale M. However, the failure to transfer technology to India as a result of these purchases is seen as a loss for the Indian defence industry.
India Purchases 36 Rafale B/C Aircraft from France for Air Force in First Phase
India took delivery of all 36 Rafale B/C fighter jets ordered by India in 2016 under an agreement with France in December 2022. The Rafale aircraft were deployed at air bases in Hasimara in West Bengal and Ambala in Haryana.
In 2016, New Delhi signed a sales agreement with French Dassault Aviation for a package of 36 Rafale fighter jets worth $ 9.2 billion, and the first 5 fighter jets were delivered to India in July 2020. Since the signing of the Rafale contract with France, the Indian public debate on the acquisition of these aircraft has not ceased. For example, the Indian National Congress (INC), which is currently the main opposition party in Indian politics, continues to argue that the Rafale aircraft, which were negotiated at a lower price with France during their rule, were purchased at three times the price after Prime Minister Narendra Modi came to power in 2014.
The Modi government had refused to disclose the price paid for the aircraft, citing the confidentiality clause in the contract with the French company. For this reason, the purchase price of 9.2 billion dollars is said to be a somewhat speculative value. According to some sources, the sales price is expressed as 8.85 billion dollars.
Additional Weapon Integrations Made to Indian Rafale B/C Aircraft
Dassault had agreed to make some modifications to the Rafale B/C type fighter jets purchased by India. Accordingly, new generation missiles such as Meteor, Scalp and Hammer were integrated into Indian Rafales. Although these modifications are claimed to provide the Indian Air Force with extra capabilities beyond rivals such as Pakistan and China in the region, they are not seen as game changer modifications. The Rafale fighter jet procurement package is known as India's first major purchase of fighter jets in 23 years since the acquisition of Su-30 jets from Russia.
India Continued to Purchase Russian-Made Fighter Jets
In 2020, it was decided to purchase 33 MiG-29 and Su-30 Packages from Russia. In early July 2020, within the scope of the decision taken by the Indian Ministry of Defence, a total of 2.43 billion dollars was paid to the Russians for the purchase of 21 Mikoyan MiG-29s and 12 Sukhoi Su-30MKIs. The MiG-29 aircraft purchased consist of second-hand aircraft modernised by the Russians.
The newly purchased MiG-29 fighter jets will operate together with the MiG-29 aircraft, which have been serving in the Indian Air Force since 1986 and upgraded to MiG-29M. The newly purchased 12 Su-30MKI aircraft were planned to replace the missing aircraft due to accidents over the years. The Su-30MKIs will be manufactured in India by Hindustan Aeronautics Limited (HAL) under a licence production agreement signed with the Russians. HAL was very keen on these additional orders in order to keep the previously established Sukhoi production line open. From past to present, 272 Su-30 type fighter jets have been supplied to the Indian Air Force from Russia.
Rafale M Aircraft Purchased for Indian Navy
Meanwhile, according to reports in 2023, the Indian Navy wants to purchase Rafale M fighter jets from France in order to strengthen its inventory. In this context, India has opened a new international procurement tender to replace the aging Russian MiG-29K fighter jets in its inventory. Rafale-M from France and Boeing F/A-18E/F Super Hornet developed by Boeing from the United States participated in the tender. India announced that as a result of the tender, it was decided to procure Rafale M fighter jets. Flight tests of both fighter jets were completed at the end of December 2022 at INS Hansa, India's naval base in Goa.
Following this, the Indian Ministry of Defence approved the procurement of 26 Rafale-M fighter jets and 3 Scorpene (Kalveri) class submarines from France. Within the scope of the procurement made in line with the needs of the Indian Navy, it is stated that approximately 10 billion dollars will be paid to France for 26 Rafale Marine fighter jets, 8 of which will be for training purposes for the INS Vikrant aircraft carrier, and 3 additional Scorpene (Kalveri) class submarines. The agreement between the two countries was signed during Prime Minister Modi's visit to France on 13 July 2023.
India Aimed to Realise Technology Transfer from France during the Manmohan Singh Government
India has purchased a total of 62 Rafale fighter jets, 36 in the Air Force and 26 in the Navy inventory. With this number of Rafales, India already has the largest Rafale fleet after France. Egypt has 54 Rafale fighter jets, Qatar 36 (there is a possibility of purchasing +36) and Greece 24. Meanwhile, Saudi Arabia has also launched an initiative to purchase 54 Rafales from France after Germany blocked the sale of Eurofighter Typhoon.
In recent years, India is known as a country trying to develop its own aerospace industry. India has a rising economy. By 2050, it is expected to be the second largest economy after China. Militarily, it has border problems with both Pakistan and China, and is keen to have a strong army. India, which mainly uses Russian aircraft in the aviation industry, has also turned towards the Western world in recent years and started to use French aircraft. India, which has developed closer relations with the USA and European Union countries during the Modi era, indirectly supports the AUKUS, which was signed between the USA, the UK and Australia on 15 September 2021 and is seen as a NATO-like formation between these three countries in the Pacific region. In addition, with the IMEC (India, Middle East European Community) trade line, which was put forward last month, it is trying to realise an alternative route to the belt road project of Europe and China. From this point of view, I believe that India, a BRICS country, will continue to develop closer relations with the US and its allies rather than China and Russia in the coming years and will be more inclined towards Western weapons.
In this context, it would have been expected that India, which says 'produce your own aircraft', would have purchased a large number of Rafales from France, while at the same time transferring technology. However, according to the information in open sources, it is understood that France does not favour this issue, despite India's request.
According to France, the 36 jet orders signed in 2016 were not sufficient for high-level production or technology transfer to India. "If France had received an order for 200 aircraft from India, it would have been possible for Dassault Aviation to provide technology transfer", a similar policy was mentioned.
At the time of the India-France technology transfer discussions, Dassault CEO Eric Trappier had said that France was in talks to help India with the next-generation Advanced Multi-role Combat Aircraft (AMCA) as part of the offset obligations of the Rafale fighter jet deal. However, the senior executive had also said that a larger order of close to 200 Rafale jets would be ideal to transfer high-end technology and production capabilities to India at a 'competitive level'.
During the Manmohan Singh government in India, technology transfer was included as part of the conditions for the procurement of 126 Rafale aircraft. Probably for this reason, a package of 126 aircraft was put on the agenda instead of 36 aircraft. India had to purchase a large number of aircraft for technology transfer and pay France the price required for technology transfer. Therefore, the price India would pay for technology transfer was included in the price of the 126-aircraft Rafale package, which was planned to be purchased before 2014. At that time, this cost would also be added proportionally to the 18 Rafales to be purchased from France in flying condition.
Did the Change of Power in India in 2014 Disrupt Technology Transfer for Rafale?
In 2014, after the election of Narendra Modi as prime minister instead of Singh, India was forced to change or modify its procurement package. As a result, it is known that the 36 Rafale jets purchased in flying condition were purchased without including technology transfer costs.
There is some information that there is a 14 per cent price difference between the 18 aircraft planned to be purchased by the Singh government and the 36 aircraft purchased by the Modi government. There are even some who claim that the price difference per aircraft is even greater. According to some Indian defence analysts, if the cost of technology transfer is subtracted from the Singh-era deal, France was paid more per aircraft in the deal signed under Modi.
Regarding this issue, Sudhanshu Mohanty, an Indian Defence Ministry official who examined the cost dimension of the deal at the time, said in a post-retirement statement: "Since foreign manufacturing companies spend several years to help transfer technology to local production, there is a significant cost for technology transfer. In the case of Rafale, it was calculated that indigenisation of new developments, including additional India-specific modifications, would also be very costly."
Therefore, it was claimed that Modi changed the old agreement after coming to power, removed the technology transfer section from the new agreement, decided to purchase 36 Rafales in flyable condition, and even ignored a price offer from the Eurofighter consortium, a rival aircraft, for a similar configuration without technology transfer, which was 20% cheaper than the Rafale package. As a result, the Indian and French governments did not disclose the terms of the old and new agreements. Therefore, it was not possible to know what France was demanding for a possible technology transfer.
Technology transfer means the transfer of new technology from the source (Dassault aerospace) to a secondary user (HAL) in order to strengthen their economy. Since the technology transfer would also give the user access to key technologies developed by the source, HAL would be able to produce Rafale aircraft as many times as it wanted in line with India's needs, and would be able to make the modifications required by the Indian Air and Naval Forces in the future, either together with Dassault or on its own. However, according to the French, this could not be possible with a purchase agreement for only 36 aircraft. Moreover, Dassault aviation claimed that the labour cost of producing a Rafale in HAL was 2.7 times that of producing one in France, and that opening a production line in India (even without know-how) would also increase the production cost of the aircraft.
Conclusion
Although India has purchased a large number of Rafale, MiG and Sukhoi aircraft from abroad, it has not been able to conclude the desired technology transfer agreements for its aerospace industry, HAL. There seems to be no clear government policy in this direction. There are those who argue that if the UPA had continued in power, the Rafale purchase would probably have been accompanied by technology transfer. However, there are those who say that after the change of power in 2014, the Modi government did not insist on technology transfer from France for various reasons. The issue of technology transfer for Rafale may be part of the internal debates within Indian domestic politics. But the same discussions are not taking place for Sukhoi, for example. I think that New Delhi has not pursued a determined policy to realise technology transfer in fighter jet procurement despite large purchases. On the other hand, as the CEO of Dassault has clearly stated, it is known that France does not favour technology transfer.
Under the current circumstances, it seems that the Indian Defence Industry will have to be content with the production of Indian-made Tejas aircraft, a light fighter similar to South Korea's FA-50. The Indian Air Force is replacing its MiG-21 aircraft with Tejas. Previously, 32 Tejas Mk1 and 73 Tejas Mk1A fighter jets were ordered. With the additional order placed last October, the Indian Air Force will have a total of 220 Tejas aircraft in its inventory. In the production of the new Tejas, it is planned to emphasise domestic production instead of UK-sourced parts. I believe that India, which has failed to transfer technology for Rafale and Sukhoi, is still far behind the desired levels in the aerospace technology race, even when only Tejas is considered. I do not see it as likely that a country of India's scale will be able to open up a China-like aerospace industry in the near future.
References
Manu Pubby, “Will need larger Rafale order for true Make in India: Dassault CEO”, The Economic Times, 14 Temmuz 2018, https://economictimes.indiatimes.com/news/defence/will-need-larger-rafale-order-for-true-make-in-india-dassault-ceo/articleshow/57160249.cms?from=mdr
M.K.Venu, “High Transfer of Technology Costs Made UPA’s Rafale Deal Much Cheaper than NDA's”, Wire, 30 Ocak 2019, https://thewire.in/government/high-transfer-of-technology-costs-upa-rafale-deal-cheaper-nda
Ahmet Alemdar, “Hindistan Hava Kuvvetlerine Rafale savaş uçağı teslimatı”, DefenceTurk, 2 Nisan 2021, https://www.defenceturk.net/hindistan-hava-kuvvetlerine-rafale-savas-ucagi-teslimati
Mehmet Yiğit Tanış, Hindistan'dan Rafale-M ve Scorpene denizaltı tedariki, 14 Temmuz 2023, https://www.savunmatr.com/hindistandan-rafale-m-ve
Clement Charpentreau, “Saudi Arabia to order 54 Rafale fighters from Dassault Aviation: report”, Aerotime Hub, 22 Ekim 2023, https://www.aerotime.aero/articles/saudi-arabia-order-54-dassault-rafales-report
