At Aero India 2015 in Bangalore, Defence Minister Manohar Parrikar announced that a decision on India’s $20 billion medium multi-role combat aircraft (MMRCA) deal would be made soon, after the contract negotiation committee’s final report, due by end-February or early March. Reports indicate that the defence ministry has realised that the French Rafale, chosen as the lowest bidder, will cost much more over its life cycle than initial projections. While there might be other issues with French manufacturer Dassault, such as its unwillingness to be held liable for the quality as well as the timely and on-cost delivery of 108 aircraft to be produced under licence at Hindustan Aeronautics Limited, the tardiness in decision-making does not reflect well on the defence ministry.
India might be well served by the fighter it eventually chooses, but the lessons from the MMRCA deal are salutary. The defence ministry’s inexperience in undertaking complex negotiations has led to this situation. It erred in calculating the total costs of buying, maintaining and flying the fighters over the 40-year life cycle. The MMRCA deal has been in the works for nearly 10 years now, which should have been sufficient time to avoid such a mistake. As this deal was the cynosure of all global defence manufacturers, its likely abandonment will portray India in poor light. Under the UPA government, the ministry had already earned a bad name for its knee-jerk reactions to charges of corruption in defence deals.
