HAL in Talks with Dassault to Manufacture Rafale Fighter Jets

Defence Industry

New Delhi: Leading Defence Public Sector Undertaking (DPSU) Hindustan Aeronautics Limited (HAL) is reportedly in talks with French aircraft manufacturer Dassault in a move to revive old relations for the manufacture of Rafale fighter aircraft.

The two sides have held several rounds of talks for possible cooperation in producing Rafale fighter jets in India for additional anticipated orders under a ‘staggered procurement’ plan.

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The talks have taken place between the companies on possible work share for additional orders of the cutting edge combat jet, though there is no going back to earlier discussions that broke down in 2012 over differences in localisation and pricing.

The two aviation companies are old partners, having worked most recently on the $2.1 billion deal to upgrade the Indian Air Force’s Mirage 2000 fleet. If additional orders are placed for Rafale — Chief of Defence Staff (CDS) Gen Bipin Rawat hinted recently that 36 more fighter jets could be ordered within four years — a work share model could be worked out to manufacture parts for the fighter jet at HAL facilities.

Currently, French manufacturers are executing the order for 36 jets and investing 50 per cent of the €7.8 billion contract price in the Indian aerospace and defence sectors as part of the offsets clause, with a factory in partnership with Reliance Defence at Nagpur also geared to produce the Falcon executive jets.

According to indications, talks have taken place on how HAL facilities and expertise could be used for the next round of localisation when more jets are ordered.

The current batch of Rafale on order are following the ‘staggered payments’ model, with India paying for 11 fighter jets every year till deliveries end. If the contract is extended, the staggered procurement could stretch over the next few years to make up for fighter shortages.

The two airbases that are being created for the Rafale on order are capable of absorbing additional jets without any change, which would also bring down the cost of the deal. If the Rafale jet deal is extended with the ‘staggered order approach’ it could lead to a rethink on earlier plans of acquiring 110 fighter jets under the Strategic Partnership (SP) model that requires an Indian company to tie up with a foreign collaborator to produce the aircraft domestically.

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