Great Expectations: Indo-French Defence Relations

The shortlisting of the French Rafale and the Eurofighter as the two final contenders for the $10 billion MMRCA deal puts a renewed spotlight on Indo-French defense cooperation, particularly as the US aircraft have been excluded. The comprehensive and impartial technical evaluation of the competing aircraft attests to the high quality of the French-made fighter. It is unclear which aircraft will win eventually, but it is clear that India has opted for the European option.

India’s long experience with French aircraft has been positive. It is widely acknowledged that the Mirage 2000 with the Indian Air Force have rendered excellent service, proving their reliability and high levels of serviceability. They performed effectively during the 1999 Kargil intrusion. It has decided to retain the 52 Mirage aircraft in service for a couple of decades more by comprehensively upgrading them and equipping them with new missiles. The $2.5 billion contract, after arduous negotiations over cost and legal issues with the suppliers and the French government, is now on the verge of conclusion.

Were the Rafale to bag the 126 aircraft deal eventually, that coupled with the Mirage upgrade project will mean a dramatic expansion of the size and scope of Indo-French defense relationship in the years ahead. The $10 billion MMRCA deal will build a relationship lasting 40 years, during which upgrades and supply of spare parts etc will add several billion dollars more to its value. The offset obligations - 50% for the MMRCA- should entail big investments in India’s defense sector, contributing, hopefully, to creating a sorely needed indigenous manufacturing capacity.

Indo-French defense ties have a long history. India made sizable purchases in the 1950s, including 71 Ouragan aircraft, 110 Mystere fighters, 164 AMX 13 tanks, 12 Alize anti-submarine aircraft, 50 air to surface missiles and several thousand anti-tank misiles. The 1960s saw a deal to produce under licence 330 Alouette helicopters, with the last one delivered in 2003.

To the 40 Lama helicopters procured earlier were added 230 Lama helicopters in the 1970s for high altitude operations. The French origin helicopters have played a vital role in our Siachen operations.

In 1979, India went in for the Anglo-French Jaguar aircraft, besides 1000 R-550 Magic1 short range air to air missiles and 40 PA-6 diesel engines for its offshore patrol vessels. The 1980s saw India procuring the Mirage aircraft, delivered in 1985-86. A transfer of technology agreement was signed in 1983 for 30 TRS surveillance radars and for another 7 PSM surveillance radars in 1988. To give an institutional framework to the expanding defence cooperation a Defense MOU was signed in 1982 and an Indo-French Defense Cooperation Working Group was constituted.

In the late 1980s the French, under pressure from US competition, apprehensive of declining prospects of their defense manufacturing industry, desirous of cutting manufacturing costs through partnerships with countries like India with a relatively technically competent lower cost defense manufacturing base, wanting to expand through such arrangements their market in a large importing country like India, and taking into consideration India’s independent minded policies, proposed a comprehensive defence relationship that would transcend a buyer-seller relationship. However, without a base of strategic understanding with France tested over time, India was reluctant to bite the bait.

In fact, things greatly soured during this period, with suspicion that the French had a role in the exposure of the Bofors deal, in which their SOFMA gun lost out to the Swedish one. The espionage scandal involving French penetration of the PMO led to the expulsion of the then French Ambassador to India.

The 1990s was a difficult period for India’s external relations. The foreign exchange crisis puts India’s economy under stress. India came under US pressure on non-proliferation issues, especially on the CTBT and the FMCT. In the post Soviet heady period for the West, the French too pushed vigorously to implement the global non-proliferation agenda, including the permanent extension of an unamended NPT. Despite dissonances, the Indo-French Defense Cooperation Working Group was revived in 1995, aimed at promoting high level visits, joint training and exercises, R&D programmes and arms procurement.

India’s nuclear tests in 1998 tangibly changed the political backdrop of Indo-French defense ties. The politically accommodating position France took on the tests, encouraging a dialogue with India rather than following the US led sanctions route, opened a space of confidence between the two countries, with a positive impact on defence relations. The Strategic Dialogue with India instituted in 1998 was complemented with the settting up of a High Committee on Defense Cooperation headed by representatives of the respective Defence Ministers.

A steady exchange of high level visits from 1998 onwards followed, including the French Chiefs of Defence Staff, the respective Air, Army and Naval Chiefs as well as Defense Ministers, with the High Level Defence Committee meeting regularly. In 2006, Pranab Mukherjee as Defence Minister signed a Defence Cooperation Agreement with France. Regular naval exercises (Varuna), with the participation of the nuclear carrier Charles de Gaulle, and air exercises (Garuda) have continued.

The French expectation of a major naval deal to mark the upsurge in political ties after our nuclear tests was fulfilled with the $3 billion Scorpene deal in December 2005, amid some controversy. In the area of R&D, identified projects with France included aero-engines for the Advanced Light Helicopter, the Kaveri engine for the Light Combat Aircraft, the Shakti engine for Dhruv, the transfer of technology to DRDO for missile development etc. Separately, France was also involved in the upgradation of Mig 21s.

Despite the impressive list of projects with France, its share of the Indian defence market in value terms has been small. Between 1998 and 2005, France bagged only 2.48% of the Indian weapon projects, compared to the Russian share of 76.65%. To take another figure, between 1992 and 2006 Russia’s share amounted to $13.75 billion and that of France $797 million, placing it in fifth place behind the Netherlands, Germany and the UK.

Another major project under active negotiation is the joint development and manufacturing of the Maitri, the Short Range Surface to Air Missile (SR-SAM). The French, as the lowest bidders, expect the Kaveri engine project to be awarded to them in the near future. They are also eyeing the contract for 6 additional submarines following up on the Scorpene deal.

Despite extensive mutual dealings over decades, Indo-French defence cooperation has erratic undercurrents, with negotiations buffeted by difficulties and controversies. Our side complains about high prices, commercial cupidity, political leveraging etc, while the French express frustration with slow decision making, lack of transparency, bureaucratic apathy and arbitrariness.

The cancellation in December 2007 of the $500 million 197 helicopter deal won by the French AS 550 Fennec over the American Bell 407 exasperated the French political leadership, convinced that it was done under US pressure. In the re-tender, the French, pitted against the Russians and Italians- with the Americans choosing not to bid- are confident about success.

The French received another blow with the decision in 2009 to cancel, after completion of negotiations, the tender for 6 Refuelling Aircraft worth $1 billion won by the military version of the Airbus 330 aircraft against competition from the Russian IL-78. A fresh call for bids has been made by the Defence Ministry, with the life cycle costs of acquisition to be evaluated this time. The French believe that while their equipment may be more expensive to begin with, its life cycle cost involving a number of operational parameters is lower.

Under pressure from competitors, with a limited scope for domestic orders in Europe’s peaceful environment, and with China under an arms embargo, the attractiveness of the large Indian defence market for the French defence industry is manifest. The highest level French leadership promises to build a genuine defence partnership with India, including major technology transfers.

The importance of France’s record as a trustworthy supplier is obvious. With India in mind, France remains cautious about supply of advanced weaponry to Pakistan. It will have to compete with other rivals such as Russia, Israel and, of course, the US for a share of the US $200 billion expected Indian acquisitions in the next 12 years.

Mutual interest should, however, assure France a befitting position in the Indian defence space.

---------------------------------------------------------------------------------
Published in Defence and Security of India Dated: 5^th June, 2011