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INDIA’S $10BN MMRCA PROGRAM STILL A LONG WAY OFF

INDIA’S $10BN MMRCA PROGRAM STILL A LONG WAY OFF
By Bulbul Singh

02 Sept 07. Even as India floats a $10bn global bid for purchase of 126 Medium Range Multirole combat aircraft (MMRCA), the Indian Air Force will need to buy combat aircraft on single vendor basis as well, as the process of procurement of the 126 combat aircraft will take too long and the Indian Air Force is already facing a severe depletion of strength.

In the biggest weapon purchase by India, the Request for Proposal (RFP) worth $10bn was floated in August 28 week for the purchase of 126 MMRCA. The RFP was made for Russia’s MiG-35, Swedish JAS-39 Gripen, French Rafale, Lockheed Martin’s F-16, Boeing’s F/A-18 Super Hornet and the Eurofighter Typhoon.

It took eight years for the Indian defence ministry to formally issue the RFP after the Indian Air Force first made the demand for the MMRCA in 1999. The RFP was issued 18 months after the Request for Information (RFI) was first floated in December 2005. It will take another eight years for the contract to be finalized and the first MMRCA would arrive three years after the contract is signed, which means that the aircraft would start flying after 2017, something the Indian Air Force is not prepared for.

An Indian Air Force officer said there is already a threatening level of fleet depletion, which has come down from 39 squadrons to around 31 squadrons and will fall further to around 27 squadrons in another three years, despite the license production of the Russian Su30MKI aircraft currently
underway at Hindustan Aeronautics Limited,(HAL)at Bangalore. One Indian Air Force squadron comprises of 18 combat aircraft.

The Air Force officer added that the contract may take longer to finalize as it will be difficult to decide an aircraft with a range from 14 tones of the Gripen to over 30 tones of the F-18.

The RFP specifies that the range of the aircraft should be between 14 to 30 tones. In such circumstances the Indian Air Force will be forced to buy combat aircraft on single vendor basis from existing suppliers like Dassault of France which has supplied Mirage 2000H and MiG Corporation of Russia which has supplied variety of MiG variants.

The MMRCA bid came as the homegrown Light Combat Aircraft is behind scheduled by over a decade, and still it is not certain when the aircraft will be inducted.

The contract finalization of MMRCA will have to go through a long haul of the extremely slow Indian Defence Ministry procurement process, see general election, as the current tenure of the ruling government ends in mid-2009. In addition the MMRCA contract will pass through a phase of change in geo-political situation, when India’s defence ties with United States will rocket after the Indo-Nuclear deal will be inked by the year end.

In addition, the Indian government has increased the mandatory offset from the current level of 30 to 50 per cent which would mean over $5bn worth of offsets will be created for the Indian defence industry which has to date not seen any major JV with an overseas defence major, as the current level of Foreign Direct Investments allowed are only 26 per cent.

The Indian defence ministry took ten years to finalize the purchase of 66 Hawk trainers with no offset clause.

Sources in the Indian defence ministry said the value of MMRCA deal will go up to $16bn by the time contract is signed due to cost overruns due to delays, and additional requirements of the Indian Air Force which will creep in at a later stage.

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