India's largest-ever military deal is likely to bring in big business for the private sector with the French side looking to set up a production centre for the Rafale fighter aircraft as well as a low-cost executive jet in India, besides sharing vital aircraft technology for the indigenous Tejas project.
Officials familiar with the project have told ET that major partners for this 'Make in India' project are currently being identified by the French side and are likely to include Anil Ambani's Reliance Defence Systems, Noida-based Samtel and Bharat ElectronicsBSE -0.36 %. These officials, both Indian and French, spoke on the condition they not be identified.
Spokespersons of the Anil Ambani-led Reliance Group told ET "there is no development". Officials on the French side told ET, on condition of anonymity, that the agreement between Rafale and an Indian partner will be on the lines of the 2012 agreement between the French company and the Mukesh Ambani-led Reliance Industries.
The NDA government had reformatted the UPA government deal and ordered 36 aircraft, instead of 126. The Rafale fighter deal, which will bring in at least $4.5 billion into 'Make in India' projects as per the contract being negotiated, is set to involve a third production line for the aircraft in India, French officials have told ET.
While two lines for the fighter are currently active in France at the same facility, a third line in India would take care of export orders for the fighters and also possible future orders by the Indian Navy and Air Force. The line would also support the production of a low-cost variant of the 'Falcon' executive jet for the Indian and Asian markets.
"It will not be possible to roll out any of the 36 fighters being acquired by India from the production line as it would take time to set up but future orders, including exports, will be fulfilled with the new line," a person involved in the discussions has told ET. "At most, the final painting of the last ten aircraft to be delivered to India could be carried out at the Indian assembly line. This itself is a very high technology process as the fighter has a special anti-radar coat," the person added.
Besides the joint production facilities in India, the French side is also set to transfer some key technologies to DRDO that would benefit the Light Combat Aircraft (LCA) project. A complete list of the technology to be transferred is being finalised but would include several systems to make the LCA more effective.
Technology to be transferred includes the air intake system for the fighter, an undercarriage for the naval variant of the LCA, cutting edge radar absorbing painting technology as well as an integrated production line software and management system for the fighter aircraft.
While the main Rafale contract is likely to be signed this financial year, as was reported by ET, a separate contract for armament systems will be signed at a later date with French company MBDA. A partnership for transfer of technology and production could be inked with the Defence Research and Development Laboratory (DRDL) that specialises in advanced armaments.
Engineer-General Stephane Reb, Director of the International Directorate of the DGA (General Directorate for Armament) of the French Ministry of Defence is in New Delhi this week to finalise the inter-governmental agreement draft that is likely to be signed before January 26 when French President Francois Hollande will visit India as the Chief Guest at the Republic Day Parade.