30 INDIA TODAY OCTOBER 8, 2018
RAFALE DEAL
dent Macron’s official visit,
showcasing its commitment
to the government’s flagship
Make in India programme.
Reliance was one of the
firms. Dassault is still nego-
tiating the contracts along
with its partners Safran
and Thales. The estimated
Rs 30,000 crore offset pie
will be carved up between
Dassault, Safran and
Thales, with Dassault get-
ting 40 per cent and Safran
and Thales 30 per cent each
(see How the Rs 30,000 cr
Offsets Will Be Spent). The
DRAL JV could account
for between 15 and 17 per
cent of Dassault’s share of
the offset pie or roughly
between Rs 1,260 and
Rs 1,428 crore.
The firm started as-
sembling its first aerospace-
related components—nose
cones for the Falcon 2000
business jets—this April.
A French team will come
in to certify their quality
before they can be exported. Once the
components are exported, Dassault will
take the export documents to the defence
ministry’s Defence Offsets Manufactur-
ing Wing (DOMW) set up to vet offset
credits. The factory turnover will then be
adjusted against Dassault’s offset cred-
its. This process begins by September
2019, three years from the signing of the
contract. As far as profits are concerned,
Dassault estimates DRAL will take at
least a decade to break even. “The aero-
space business is a slow grind. Reliance
will get 51 per cent of the share of profits,
but only if the company makes profits.”
WHO IS THE BIGGEST BENEFICIARY
OF THE RAFALE OFFSETS?
The Defence Research and Development
Organisation (DRDO), which potentially
stands to gain the most from the Rafale
offsets. Dassault officials say nearly 30
per cent of the Rafale offsets have been
set aside for the DRDO. This could even
go up to 50 per cent. For over two years,
defence ministry officials and scientists
agonised over what to do with the offset
windfall brought in by the Rafale deal.
The DRDO saw in the Rafale’s M88 en-
gine a chance to revive India’s own f lag-
ging Kaveri engine programme. A reli-
able high-performance aircraft fighter jet
engine is a complex piece of technology
and its manufacturers can be counted
on the fingers of one hand. Even China
has been unable to perfect one despite
trying for decades. Early this year, DRDO
labs GTRE (Gas Turbine Research Es-
tablishment) and aircraft designer ADA
(Aeronautical Development Agency) be-
gan final negotiations with Safran and
the IAF to decide how Dassault and Saf-
ran could jumpstart the Kaveri engine. If
they are indeed able to field an updated
Kaveri engine with over 90 kN thrust,
they could power the indigenous LCA
Mark-2 aircraft and future aircraft like
the Advanced Medium Combat Aircraft(AMCA). “We want our French partners
to not only g ive us the k nowhow, but a lso
the know why—to vet our designs and
certify them,” says a DRDO official.WAS HAL SIDELINED IN THE 36 AIR-
CRAFT DEAL?
It is a fact that HAL did not get to build or
assemble the 36 Rafales—all of them are
being bought from Dassault in a f lyaway
condition, deliver ies w ill star t in late 2019
and will be completed by 2022. MoD of-
ficials say it was ‘uneconomical’ to make
just 36 Rafales in India and point to the
fact that talks for building 108 Rafales
that were under way between HAL and
Da ssault were dead locked bet ween 2012
and 2015. Areas of disagreement includ-
ed work and responsibility share as well
as the man-hours required for making
aircraft components. The Rs 1.63 lakh
crore deal was finally scrapped in 2015
and the PSU, which enjoys a monopoly
over aircraft manufacture in India, lostLIE OF THE
LAND
The Dassault-
Reliance facility
at the MIHAN
SEZ in NagpurTHE NAME OF RELIANCE GROUP HAD APPEARED AS PART OF THE
‘NEW FORMULA’ OF NEGOTIATIONS ON THE PURCHASE OF
RAFALE, DECIDED BY THE MODI GOVERNMENT AFTER TAKING OF-
FICE. ASKED WHETHER INDIA HAD LOBBIED FOR RELIANCE GROUP
TO PARTNER WITH DASSAULT, HOLLANDE SAID HE WAS “NOT
AWARE”. “DASSAULT IS THE ONLY ONE ABLE TO SAY IT,” HE SAIDSEPT. 21, 2018: FRANCOIS HOLLANDE
to an AFP reporter in MontrealSHEKHAR SONI