While visiting France in early April, Indian Prime Minister Narendra Modi announced the acquisition of 36 French Dassault Rafale jets.
The announcement capped years of sometimes contentious negotiations, which had intensified since Modi came to power last year.
The Diplomat’s Sanjay Kumar spoke with senior journalist Ingrid Therwath, South Asia editor with Courrier International, a leading French magazine, about the significance of the deal for France and its relations with India, and what might lay ahead.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
How was the deal finally done? Were you aware of it?
Initially, the figure that was announced at the joint press conference between Indian Prime Minister Narendra Modi and French President Francois Hollande was a bit of a disappointment. For three years the deal was on the table and negotiations had been going on for 126 fighter jets. I learned through an informal source 24 hours before the joint press conference that it was to be 63 Rafale jets. When Modi announced the decision to buy 36 jets there was initial shock and disappointment among the French people.
However, more than disappointment there was a sense of relief that the deal has come out of the lurch which it has been in for the last three years. Both India and France were eager to break the logjam and move ahead. Negotiations were going on and on. There is relief in France now that something has come out of the three years of negotiations.
What does it mean for France?
The French government has a target of selling 40 Rafales this year. A couple of months ago Egypt bought 24 and now India is buying 36 off the shelf. This is rather good news for Dassault, which was facing a huge financial crisis. The deal comes as a lifeline for the French defense industry.
The fighter jet deal is a big political boost for the beleaguered French President François Hollande, who has been floundering ever since he assumed office in 2012. His popularity is really low. In recent local elections his socialist party performed very badly.
Now with the defense deal the government can showcase positive figures on the economic and defense fronts. Hollande’s international stature has gone up after the agreement.
Does the deal herald the end of the negotiations and the final cap on the number of combat aircraft that India is going to buy from France? Or is the transfer of technology, India’s main demand over the years, a possibility?
There are two ways to look at the deal. Either India gets out of the Rafale deal saying that we have bought the plane and that’s it or India now goes to phase two of the negotiations which I think is likely, though I am not privy to the confidential part of the deal. The reason being that Indian military needs to renew its equipment; its fleet is aging. The Rafale is a true multi-role combat aircraft. Though it is expensive, it is efficient. India has varied terrain and a location in a complex geopolitical neighborhood – the Rafale suits its requirements.
If there is a phase two of the negotiations it would be centered around the transfer of technology. France understands that for New Delhi, the Make in India concept is important.
In the French media there has been discussion as to the recipient of any technology transfer. Can you shed some light on that?
The question is who would build the new lot of Rafale jets if the transfer of technology takes place. Would it be state-owned Hindustan Aeronautics Limited (HAL) or some private player. That is the issue both in France and India. What I gather from my sources is that Indian industrialist Mukesh Ambani’s company is really keen to do a technology transfer in the defense sector. Ambani is a big contender. With India’s biggest industrial house a very close friend of Modi, Ambani coming into the picture is a real possibility. Dassault is also not keen on HAL. It seems that the government-owned company is not a reliable partner. It does not subscribe to strict quality standards.
Are you aware of the criticism in a section of India’s media, terming the deal too expensive and done without a proper bidding process.
The French general public are not really aware of the debate going on in India. I don’t think there was any irregularity in the deal. There were six contenders initially so it was a fair game. What is happening in India between HAL and Ambani, the French press is not bothered about that. Its an internal issue for India. But France is happy that the deal got unstuck and came to be signed .
How do see Indo-French relations after Modi’s visit?
I think the relationship has always been very good. France and India really like each other. For the French, India is a wonderful country, and the majority [of the French people] have a very positive image of the South Asian nation. France would like to do business with China but they have a very negative image of the communist regime. India has soft power. France has always been a consistent ally of New Delhi. If you had noticed, France raised concerns over the release of the 2008 Mumbai attack mastermind Zakiur Rehman Lakhvi recently. This deal deepens that bond.
What other agreements were inked during Modi’s visit to France?
There were number of other deals that were signed between France and India. They signed agreement on water, sanitation, waste management, transport and metros, roads and infrastructure. One important deal was on the European Nuclear Reactor, built by AREVA in Jaitapur in the western Indian state of Maharashtra. The negotiations with AREVA were very difficult because of local resistance to the nuclear plant. The deal is important for the French nuclear firm. Just as Dassault really needed the Rafale contract to boost its financial position, AREVA also needed [the Indian deal] for its survival. So the Indian PM’s visit has been oxygen for these companies.