Rafale deal: How successive Prime Ministers turned Make in India into Made for India

By Mohan Guruswamy*
Prime Minister Narendra Modi, after making all that hoopla about Make in India, tied up one of the biggest arms deals in the world in recent times by placing an order to buy 36 Rafale fighters from France. We are still to be officially told about how much this will cost us. From the break-up available in media some questions need to be asked.
The Rafale is a twin engine, canard delta wing, multi-role fighter designed and built by Dassault Avions to replace a multitude of specialized platforms such as Jaguar, Mirage F-1, Mirage 2000 and Super Etendard. To that extent it is truly a multi-role aircraft, but still a far cry from what it was initially intended to replace – Mirage 2000.
The single engine Mirage 2000 was designed as a competitor to USA’s F-16 and made an impressive debut at the Farnborough air show in 1978. In 1985, in response to Pakistan’s acquisition of F-16 fighters, the Rajiv Gandhi government decided to induct 150 Mirage 2000 fighters into the IAF. The first 49 aircraft were to be imported from France and the rest manufactured by Hindustan Aeronatics Ltd (HAL).
But the second part of the programme was not implemented despite HAL having invested in assembly line for Mirage 2000s. What happened is still a matter of speculation. In 2004 India bought 10 more Mirage 2000s. In July 2011, India approved a $3 billion plan to upgrade the Mirage 2000 fleet, and the first of the upgraded fighters came last month.
But there is another scandal implicit in how a bid by Indian Air Force (IAF) to buy more single engine Mirage 2000 fighters became a bid for the heavy Medium Multi-Role Combat Aircraft (MMRCA). But the Ministry of Defence (MoD) turned this IAF request down, opining that the Mirage 2000-5 variant being offered by Dassault was a different aircraft because it was not the Mirage 2000. The "dash 5" was enough for the mandarins to decide it was a different aircraft and hence a fresh bid should be called for.
This is how the requirement for a light fighter became a tender for a heavy twin-engine fighter. Thus, by willful default a bid to replace the aging and depleting MiG 21/23 and 27 fleet and fill in the gap till, and if and when, Light Combat Aircraft (LCA), with Mirage 2000, became a white elephant of a deal that will end up costing the country over Rs 50,000 crore. That’s how Make in India becomes Make for India.
This year India has earmarked for defence a sum of over Rs 2.47 lakh crore, representing 1.7% of GDP, and almost 13% of the Central Government budget. This expenditure represents an increase of about 8% on defence over the previous year. Capital expenditure accounts for 41.15% of the budget. This is a juicy Rs 94,600 crore.
From 2015 to 2025, India is expected to spend a sum in excess of $200 billion on capital expenditure. This is a lot of money by any standards. At present India spends almost 70% of its capital expenditure on imports. India’s import dependence is well known, as are its reasons and it is unlikely to change soon.
It is also a cause for many sniggers in the international strategic community on India’s pretensions of being a major power. That’s why, apart from the huge economic benefits, Make in India becomes so important. Without it we are just like another Saudi Arabia splurging on military hardware.
It's not that India is incapable of indigenizing, but for that to happen it must be willing to make do with what is possible and its armed forces must not insist on state of the art weapons systems right away. That is at the crux of this problem.
It is not infrequently that our top brass will simply say if the service cannot have a particular weapons system it cannot guarantee the outcome of a conflict. Often this argument is just a fig leaf to obscure other intentions. Thus many programs to develop indigenous main weapons like fighter aircraft and tanks have fallen by the wayside.
LAC development is a case in instance. IAF did everything possible to stall the project by changing requirements and delaying approvals at various stages. For instance, when the Aeronautical Development Agency (ADA) team designing Tejas proposed changing over to the new and more powerful GE414 engine instead of the somewhat aged GE404 power plant, IAF balked and insisted on a complete approval of all specifications again.
It took some more years before this happened. The DRDO must also share a good part of the blame for this as it has a habit of over promising and being unable to deliver on time, or often at all. Sometimes the DRDO just bluffs.
When the Indian Navy asked the Defence Research and Development Organisation (DRDO) point blank whether the Trishul surface to air missile to defend ships against sea-skimming missiles was tested and ready for induction, the answer was affirmative. The truth was that the Trishul was a failure and its promises a sham. The Indian Navy had to then hastily acquire the Israeli Barak for which a pound of flesh was carved out of its tight budget.
Not all purchases took place because of deals behind them. In fact, the deals were far and few in between. When they did take place the considerations were very small. One Air Chief was quite happy with an SLR camera and some lens.
In 1967, India decided to buy the MiG-21 from the former Soviet Union, and this simply because the UK and US had shut all doors to us. So India turned to USSR, which not only agreed to sell the supersonic MiG-21 but also agreed to transfer know-how to manufacture them in India.
In 1967 Indira Gandhi on a visit to Moscow decided to accept Leonid Brezhnev’s offer of Su-7 ground attack fighters without even consulting the IAF, who would have no doubt formed a committee and would have been contemplating for a long time. The aircraft was big, ungainly and even unconventional. One veteran test pilot after flying it just kept uttering “why, why?”
The plane became a butt of ridicule in fighter base bars. One story had it that it was initially designed as a tank, hence the solid structure! Another was that it was meant to be a midget submarine, hence the periscope in the rear cockpit of the trainer version!
But Indira Gandhi’s judgment prevailed and IAF by the end of 1968 inducted six squadrons of Su-7s. This aircraft fared exceptionally well in the 1971 war, and despite all the jokes made about it, the joke was on the Pakistanis who lost 69 tanks and 25 field guns to Su-7 ground attacks, which played a crucial role in halting the Pakistan offensive in its tracks. If the Hunters won Longewalla, then the Su-7s won Chamb.
Another Rajiv era scandal pertained to Bofors about which so much has been written. The merits of the Bofors FH-77 155 mm howitzer are not in question, though ignorant people like Ram Jethmalani tried to paint it as a dud. But what became apparent was, irrespective of which howitzer was bought, Ottavio Quattrochi and the Hinduja brothers were cut into the deal.
The Hinduja influence to peddle went beyond parties. Atal Behari Vajpayee even wrote to then Prime Minister PV Narasimha Rao to exonerate them of all charges and Jethmalani defended them in court. Quite evidently, the Hindujas were even involved in the deal for Hawk Advanced Jet Trainers. Like the Bofors howitzer, the Hawk is top class. That’s not the issue. The issue is, as always now, how much more did we pay?
Why have things become so murky? The problem starts because of MoD's patently stupid rules on agents and representatives acting on behalf of foreign or even Indian manufacturers. MoD just doesn’t recognize their existence, forcing everything underground.
Less than a kilometre away from MoD in South Block is the tiny Claridges Hotel. The Claridges Hotel is to defence ministry sleaze, what the Taj Mahal is to love. It is a supreme symbol of all that goes on and must not happen. Suresh Nanda, one of the most successful arms dealers and a son of a former Navy chief, owns Claridges.
Now we may have the latest incipient scandal, the sudden decision to buy 36 Rafale fighters in fly away condition from France’s Dassault Avions instead of the eighteen envisaged in the tender bid, and also to dump the MMRCA tender.
Why didn't the government consider the Eurofighter Typhoon, which Britain too is offering on a flyaway basis? This opens several suspicions, warranted or unwarranted, we don't know still. It can even be challenged in the courts and the perennial litigator, Subramaniam Swamy, had promised to do just that. But why has Swamy gone quiet now?
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*Well known policy analyst. Source: Author's Facebook timeline. Contact: mohanguru@gmail.com