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June 30, 2015

Dassault's Deal With India Was Important


Amid some controversy, India took to the news with a June announcement of the purchase of 36 Rafale fighter jets from France’s Dassault Aviation. It was an important move for the nation, which counts China and Pakistan as border ‘mates’.
India, which plans to spend about $100 million on modernizing its defense resources in the next 10 years, has suffered a spate of air fatalities in the past months as a result of an ailing air force.
We spoke with KPMG Partner and India Head of Aerospace and Defence Amber Dubey who says India currently lags behind in defense technology, and it is imperative they keep up.
What is the significance of India ramping up its air defense sector at this particular time?
Amber Dubey: It is not a ramp up, India is fulfilling critical operational requirements – which was long overdue. The fighter aircraft fleet strength is at a critically low level of just 34. The actual fully operational and reliable strength is just 25 squadrons against a sanctioned strength of 42. Several squadrons of MiG 21s and MiG 27s are likely to be phased out soon. That would hurt India’s operational readiness even more. It is not a happy situation.
What gave Dassault the edge on getting this deal?
Dubey: Rafale cleared the technical trials for the MMRCA (Medium Multi-Role Combat) competition [launched in 2007, providing a base for one of the biggest defense deals in recent times] and was declared the lowest cost supplier.
It is a tried and  tested aircraft which also has an operational naval version. Mirage 2000 has served the Indian Air Force well. The combined fleet of Dassault’s Mirage (52 aircraft) and Rafale (36 aircraft) from the same supplier could also save on maintenance repair operations costs and provide ease of operations for the entire fleet.
India’s need is for more than 36 Rafales – or modern fighter jets – so do we expect to see the government step up its buying? Or will the private sector will step in here?
The public sector undertakings, especially Hindustan Aeronatuics Limited (HAL) will be the key to deciding whether India buys more foreign or Indian made jets. HAL and the Defence Research and Development Organization (DRDO) need to warm up to the Indian private sector to build a robust defense industrial base.
They need to look at the Department of Atomic Energy and the Indian Space Research Organization to understand why India has done so well in the hi-tech fields of nuclear and space programs, despite international sanctions and technology denial by global powers in the past.
In defence tech we still lag behind and are completely dependent on foreign suppliers for India’s security. This has to change. Radical policy and procedural changes are called for.
In the short run, we may need to procure more Rafales, given the Indian Air Force’s significant capability gap currently vis-a-vis China and Pakistan.
Moving forward, is Make in India going to play a role in future aviation or arms contracts?
Dubey: Yes, if we focus on developing our supply chain of large and medium scale designers and manufacturers.
In defence of her borders, India’s capabilities versus those of her neighbours, or other threats?
Dubey: Future wars are going to be smart wars as there is deterrence in terms of nuclear warheads with China and Pakistan.  Capabilities would be defined by technological superiority in terms of unmanned aerial vehicles, missile systems, nex-generation radars, cyber and satellite warfare. 

forbes

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