Indian  authorities have imposed a Penalty  on the  French firm Dassault  Aviation for the dalay of Rafale Offset Obligations ! Will the recent visit of Florence Parly help ?

On Friday , French Minister for armed forces Florence Parly said that they are ready to answer any additional needs or requests of India for Rafale fighter Jets , including for its indigenous aircraft carrier.

She had stated ,

“We know that aircraft carrier will soon be delivered and aircraft are needed. So we are open and ready to provide any other Rafale if this is India’s decision,” 

Now, it is being learned that, the Indian authorities have imposed a Fine on the French firm Dassault Aviation last month over delays in offset obligations , that originated from the 2016 Rafale Deal with India.

At the Ananta Aspen Centre , the French Minister reiterated France’s commitment to strengthening India’s defence industrial base and its willingness to offer the best of its technology with a high “Make In India” component.

A total of 33 Rafale jets have been delivered to India, all perfectly on schedule despite the disruptions of the pandemic , says the french side . But , India seems to be strict on the terms and obligation of the €7.8 billion (U.S. $8.8 billion) contract of September 2016 for 36 Rafale Aircraft.

After a multi year delay and negotiations, India had agreed to buy 36 Rafale figter jets for it's Air Force , but there were addendums, an arrangement where 50% of the contract value was to be offset and executed by Dassault Aviation and its partners Safran and Thales in seven years’ time.

India's Rafale Deal - 33 delivered so far . Picture Courtesy : News18.

French side had made a 30 per cent offset commitment for military aerospace research and development programmes and the rest 20 per cent for making components of Rafales here.The offsets will be carried out by French companies Safran, Thales, MBDA and Dassault, all part of the Rafale project.

As per the initial agreed points, the French have offered to provide stealth, radar and thrust vectoring for missiles technologies besides others to DRDO and other domestic defence firms, that is more than 70 in numbers.

The Rafale deal with a 50 per cent offset clause had the potential of businesses worth over 3 billion euros for the Indian companies, both big and small , now that potential is being delayed by the Rafale manufacturer.

The Rafale Fighter Jet . Courtesy : AFP .

Though exact value of 'Fine' is not  made public , it is  understood that , the Penalty amount will be come from the €185 million bank guarantee from Dassault Aviation, that was parked as an instrument against contractual violations.

The French side had also agreed in principle to collaborate on the Kaveri engine which lacks the real power thrust needed to fly the Tejas. An upgraded Kaveri engine with 90 kN thrust compared to the existing 72 kN can be developed with French cooperation which can eventually be used for Tejas which currently uses an American engine.

But, some sources say, the French side have been claiming that the Indian companies, who were set to receive the technology transfers, has some issues in terms of  the necessary core competencies. Will the recent visit of Florence Parly help sort out the issues ?

In another development, the United Arab Emirates (UAE) signed a deal for 80 French-made Rafale fighter planes, on 3rd of December, the order is worth €16 billion ($18 billion). It also marks the biggest bulk purchase of the aircraft since it entered service in 2004.