The Government on Monday hinted at scrapping the Medium Multi-Role Combat Aircraft (MMRCA) tender process, saying the price negotiations had “gone into a loop and vortex with no solution in sight.”
Without clearly stating that India will cancel over eight-year long MMRCA project after Prime Minister Narendra Modi announced in Paris on Friday that India will buy 36 off-the-shelf Rafale jets from France, Defence Minister Manohar Parrikar said, “A car cannot run on two paths simultaneously.”
His remarks came in response to a question whether India has now done away with the tender process after deciding to buy 36 Rafale jets through a Government-to-Government deal with France. These planes are likely to be inducted into IAF within next two years after completion of the negotiations by the end of this year.
Terming the Prime Minister’s decision as “bold”, Parrikar said the tender or Request for Proposal (RFP) for MMRCA deal in which Rafale, manufactured by Dassault, had emerged as the lowest bidder had led to “confusion and chaos.”
Keeping in view the operational necessity and strategic needs, the Government opted to buy 36 aircraft off the shelf, he said, but skirted a direct answer about the fate of MMRCA by stating the “future of tender is not yet decided.”
The tender process had gone into “a loop and vortex” and various stakeholders tried to “sort out” the issues regarding pricing but “could not do it,” the Minister said, adding, “If we had started the process it would have taken another five years.”
Maintaining that Rafale deal will be on “better conditions and lower prices” than the process, the Minister justified the deal when asked about the Government’s efforts to boost the local Defence industry through ‘Make in India’ campaign.
The MMRCA project had envisaged that 18 jets will be bought the shelf and the public sector aviation company Hindustan Aeronautics limited (HAl) will manufacture the remaining 108 planes in India.
The Defence Minister added that in his personal opinion it is always better to go for Government-to-Government deal when India has to procure strategic weapon systems involving complex and high-end technology.
As regards the IAF’s requirement for 126 MMRCA jets and the decision to buy 36 Rafales, Parrikar said all future deals for Rafale fighters would also be through Government-to-Government route. The Minister said the price tag for 126 jets was steep. While he did not spell out the figures, it is estimated the MMRCA contract was now worth over 20 billion dollars as compared to nearly eight billion dollars when the project came to commercial negotiations stage in 2012.
He also hinted that India may not buy more Rafales to meet the 126-jet target and said, “I keep my options open.” Remarking that “why should I open my cards,” the Minister signaled that India may explore other options and said direct negotiations with French Government will now decide how much more Rafale has to be bought and if it will be under ‘Make in India’ programme.