Can India Afford to 'Make' 114 Rafales in India? Experts Raise Concerns

Defence experts in India have raised concerns about the financial and strategic implications of the potential acquisition of 114 Rafale fighter jets under the country's Multi-Role Fighter Aircraft (MRFA) tender. The projected cost, as well as the impact on other crucial Indian defence programs, has sparked debate.

Analysts estimate the total cost of 114 Rafales to be approximately $25 billion, which could severely strain India's defence budget. This massive expenditure, some argue, may necessitate cutbacks or delays for other essential domestic programs like the development of the Tejas MkII and the Advanced Medium Combat Aircraft (AMCA) fighter jets.

Moreover, experts doubt the practicality of the "Make in India" aspect of the deal. They contend that locally manufacturing Rafales would likely be 20-30% more expensive than building them in France. Setting up production in India would necessitate significant infrastructure, specialized equipment, and potentially inflated prices from Dassault Aviation.

The potential deal's reliance on Dassault relocating its entire production line to India is also viewed skeptically. Industry insiders argue that Dassault has likely recouped investments in its existing French facilities, making such a move commercially unappealing.

The analysis raises serious questions about the long-term viability of acquiring 114 Rafale jets under the MRFA tender. The Indian government will need to weigh the potential financial burden against the strategic advantages of such a purchase.

Alternative solutions, including the possibility of reducing the number of aircraft procured, may need to be considered to ensure fiscal responsibility and safeguard the future of India's domestic defence industry.

 

[Vinod Kaka]

That's why indecisiveness of previous Government in office costing us now.. If we have concluded the MMRCA deal upto 2010/11 timeframe lots of things have materialize by now.. But having said that we have to take a call on this either india is ready to invest on this MRFA, project or ready to face another fate accomply like 1962 when we lost huge chunk of territory to China.. As one can earn money again but you just can't regain yours lost territory again.. As POJK Gilgit Baltistan Aksai chin are the biggest lessons from the past for us where we have nothing in our hands to regain our lost out territories back from our adversaries other than passing parliamentary resolutions & formal statements regularly issued by MEA in press conferences which have no impact on the ground other than satisfying ourselves Dil behlaane ke liye khawab acha he Ghalib

 

[charminar_waale_ismail_bhai]

I don’t know why people come up with their own numbers.

Rafal, for France, costed $ 68 million in 2014 and was given to us for ~90 million usd in 2016. Since then the price has been relatively stable, at least going by the international sales figures.

As for Su30, the difference was about 50%. So goi g from 68 million, we can get the jets for around 100 million USD per jet.

As for the surge, Dassault has already gone from 1 jet per month to 2 jets this year. The projection is 3 jet per month by the end of this year. And their CEO says that they can easily climb to 4, if new orders come up. They still are maintaining the promise to deliver first jets within 3 years of signing the deal.

As for mk2 and all, the planes are simply non existent and won’t come before at least 2040. So MRFA is an existential requirement for us.

The deal is simple.
If India can't afford it, India won't buy it.

That said, I do not trust Dassault to setup any assembly line for Rafale here in India. Why would they hurt their own prospects at retaining a cutting edge manufacturing and transfer a line of high-paying jobs to India?

 

[Parthasarathi DasGupta]

Yai Nasha meko bhi chahiye

You may or may not agree with a comment. But using filthy language is exposing your upbringing.

 

[Samir Supnekar]

Just purchase the technology of SU-57 & make 200-300 in India. Baat khatam. Koi jhig jhig hi nahi. AMCA,ORCA,TEDBF,MK I,MK II jab banega tab banega.... Yeh Western Countries kaa bahut natak jhelna padtay. Spares nahi, political angle, USA ko khush rakho. England ko Yes Sir, Yes Sir bolte raho. Upar se UN bolte rehta hai Kashmir Human rights, human rights.
Seedha SU-57, SU-75, MiG-41 assembly line establish karo India mein game khallas! 😎.
Barabar hai????? 15-4-2024 🙏🙏

 

[Parthasarathi DasGupta]

Won't happen. The only potentiality here is that the F-15EX ends up winning MRFA as a whole, which is highly unlikely. The X-32 is a non-starter simply because the US won't share the technology, and because it would still be cost-prohibitive: A flying prototype needs a large amount of money and work to be sent in to make it a combat-capable aircraft.

We have to accept it that we can't make a 5th Generation fighter. Even if the design is viable then also HAL does not have technical expertise to absorb it ! Only viable option is asking a foreign help. China is out of question. Europe doesn't have the technology. Russian one is not true stealth. Now left with USA.
Only Boeing can share technology but they will ask price for it. Lockheed can't share technology as they have agreement with USA government.
We need foreign help for AMCA. Otherwise it will be still born

 

[Anant]

We should buy only 114 rafales .because we already 36 and 26 for navy is already selected. F35 is a complete failure
No country has purchased f35. F15 ex is a 4th gem fighter with large rcs. And make in india more important than the security of the country. Except f22 no fighter can match rafales.

No country has purchased F-35? What nonsense! Except the US, the F-35 is operated by or on order by 17 other nations, with a further 2 nations' deals in the pipeline.

The F-35 has its flaws, just like any other aircraft, but it is by no means a failure. Not by a country mile.

 

[Anant]

We have to accept it that we can't make a 5th Generation fighter. Even if the design is viable then also HAL does not have technical expertise to absorb it ! Only viable option is asking a foreign help. China is out of question. Europe doesn't have the technology. Russian one is not true stealth. Now left with USA.
Only Boeing can share technology but they will ask price for it. Lockheed can't share technology as they have agreement with USA government.
We need foreign help for AMCA. Otherwise it will be still born

Boeing would also have a similar agreement with the US government, since LM's agreement comes from the X-35 era.

 

[Achal Trivedi]

The acquisition process , the geo-political and strategic intent of Leadership of India, the ability of Airforce to evaluate what is in the best interest of Nation including the prudence of Lifecycle cost and riders on Offset / TOT of the contract would ensure the best acquisition platform for the forces. My personal view would be repetition of what happened in case of Naval aircraft choosing RAFALE sel over F-18 though it also qualified and had a case of having common engine GE414 like the Tejas MKII was interoperability with airforce , sharing cost of logistics , training spares and repairs . Its always good to have competition for keeping all options open and also to have fall back options till AMCA and Tejas MKII are inducted and Indian comes up with alternate of GE-414 in collaborations with Dassault -SNECMA
We can enjoy reading all aspects from the analyst as they are in no way going to influence the decision making.

 

[Baiju Bhaskaran]

Either this person is a USA funded Chandigarh lobby or he does not know anything. From where did he arrive at 25 billion. He is talking about support structure. He forgot that support structure and infrastructure for 127 aircrafts was already part of first deal( 2 billion )which is already available. For the weapons package, all the TOT for weapons has been transferred to BDL and now they are also integrating with Tejas. So special weapons package is not required if we go with Rafale.The cost breakdown for only the aircraft was 670 cores per aircraft as per documents placed in parliament .So if we apply the same cost it will be 670 x 114 =76380 cores i.e less than 10 billion. If we go for other aircraft we will need to pay for support structure and weapons package also. So if at all we are going for MRFA, it should be only Rafael as it will be cheaper than others.

 

[Bikramjeet Goswami]

Things are slowly turning to TEDBF derived Air Force variant.
But for that we need to add new production line (Pubic Private Partnership ofc)

Private players are reluctant to join because the entire process is convoluted and there is no clear way forward.

 

[Bikramjeet Goswami]

While the cost aspect is certainly concerning, the following should be noted:

1. As of today, the IAF has 30 active fighter squadrons. These comprise 13 Su-30MKI squadrons, 2 Tejas squadrons, 2 Rafale squadrons, 3 Mirage 2000 squadrons, 2 MiG-29 squadrons, 6 Jaguar squadrons, and 2 MiG-21 squadrons. Of these, the 2 MiG-21 squadrons will be retire / changeover in 2025, followed by the 6 Jaguar squadrons between 2028 and 2035, and the 5 Mirage 2000 and MiG-29 squadrons between 2036 and 2040.
2. If we go by HAL's promises (which is an insanely optimistic thing to do, but I'll cover that in a bit), Tejas Mk 1A production is to be scaled up to 16 by 2025-26, and up to 24 by 2028-29. Even if those numbers are achieved, and we assume HAL will deliver 8 aircraft in 2024-25 (that is, by the end of March next year), the 180 Tejas Mk 1As (83+97) will only be delivered in 2033-34. Note that this figure assumes that the stated production numbers are achieved and capacity for other projects such as the Tejas Mk 2 and AMCA are completely independent. This won't be the case, so we shall take this into account.
3. If Tejas Mk 2 production starts in 2031-32, and HAL can deliver 8 jets a year till 2033-34 and 16 in 2034-35 (both overly optimistic), by 2034-35, we would have 40 aircraft.
4. Therefore, combining Points 2 and 3, we see that by 2034-35 (that is, the year when the last Jaguar squadron would be planned for retirement), we would have 180 Tejas Mk 1As and 40 Tejas Mk 2s. That makes for 10-11 active squadrons. Compared to today, we have retired 8 squadrons. Therefore, the IAF would now be at 32-33 squadrons, far short of the 42 squadron target.
5. Let's further assume that the conclusion of Tejas Mk 1A production allows for one line (8 aircraft) to be switched over to the Tejas Mk 2, with the remaining two lines going to AMCA. This would allow for 24 Tejas Mk 2 aircraft to be built from 2036-37. Let's also assume AMCA production starts at 8 aircraft in 2034-35, and scales up to 16 from 2036-37.
6. By 2040, when the last of the Mirage 2000s and MiG-29s have left service, we now have a further (as compared to 2034-35) 122 Tejas Mk 2 and 80 AMCA. That makes for 10 active squadrons. This puts the IAF at 37-38 squadrons by 2040, which is still short of the 42 squadron target.
7. Assuming Tejas Mk 2 production caps at 200 aircraft, production would cease in 2042. By that point, we would have a further (as compared to 2040) 32-40 AMCA. That puts the IAF at 41-42 squadrons, which is barely scratching the target.
8. By the early 2040s, the Su-30MKI would be nearing the end of its lifespan, and retirements would start around 2043 (to allow for 1 squadron to be retired each year, for a final retirement in 2055). Thus, the 42 squadron target would only sustainably be achieved in the late 2040s.

Based on the above points, it is clear that indigenous production (even at its most optimistic) may well not be enough. That is to say nothing about the calls to increase that target to 51-60 squadrons to account for the increased strength of the Air Forces of China and Bhikaristan.

Now, coming to practical considerations (as I referred to above):

A. HAL's claims are not sustainable for the simple reason that putting those capacities together would reach 32 aircraft a year by the start of the 2030s, and would further increase to 56 aircraft a year by 2036 (adding TEDBF production).

B. Engine bottleneck concerns, be it for F404 deliveries or for local manufacturing of the F414 or the 110 kN engine, have not been considered here. To manufacture 54 aircraft a year by the late 2030s or early 2040s, we would need 120+ engines (80 for the 40 twin-engined aircraft + 24 for the 24 single-engined aircraft + spares for the IAF). That is a very massive capacity requirement.

A more realistic estimate would be to assume a (still optimistic) 75% production efficiency for HAL. That would mean Tejas Mk 1A production would cease in 2036-37, Tejas Mk 2 production would cease in 2046-47, and AMCA would reach 168 aircraft by 2047, with TEDBF production standing at 108 by that point. That puts us at 42 squadrons in total by 2047, taking into consideration Su-30MKI retirement.

Now, coming to the cost aspects: The Rafale is a very expensive fighter, and we know for a fact that local production does tend to cost more. However, as evident by the numbers presented above, we really do not have any alternative to MRFA. This is a bullet we must bite, like it or not. If we take an aircraft other than the Rafale for MRFA (say, the F-21) for lower costs, we face the problem that we are facing with the Mirage 2000 today: Difficulty in sourcing spares.

Like it or not, this is a bullet we must bite for the costs, unless we are willing to take the aforementioned logistical headache 20 years down the line.

Or we can negotiate with Russia for favourable terms on the production/purchase of more Sukhoi 30's. Buy, develop, steal tech for further upgrades to the plarform, the logistics of the Sukhoi is already well established.

 

[Chand Ashok]

India's adversary like China & Pakistan do not follow long delaying procedures of tendering for acquisition of Fighters. Chinese PLF is already slated to induct 500 J-20 fighters and deploy 200 of these against India. Even if we don't consider J-20 to be true 5th gen fighter it is atleast 4.5 gen fighter and we need Rafael to tackle them since Tejas mk-2 will not reach induction stage before 2030. Additionally they will also deploy FC-31 near LAC and provide good no to Pakistanis. Hence only a short sighted person or someone sponsored by Chinese/ Pakistan Or rival Vendor Company will misguide asking to give up on Rafael. Rather with imminent shortage of fighter squadrons India should look to induct 200 of these fighters under make in India setting up a full scale hi tech assembly line locally. Later on HAL can utilize this assembly line to speed up production of Tejas mk-2, AMCA & TEDBF.

 

[Arz786]

While the cost aspect is certainly concerning, the following should be noted:

1. As of today, the IAF has 30 active fighter squadrons. These comprise 13 Su-30MKI squadrons, 2 Tejas squadrons, 2 Rafale squadrons, 3 Mirage 2000 squadrons, 2 MiG-29 squadrons, 6 Jaguar squadrons, and 2 MiG-21 squadrons. Of these, the 2 MiG-21 squadrons will be retire / changeover in 2025, followed by the 6 Jaguar squadrons between 2028 and 2035, and the 5 Mirage 2000 and MiG-29 squadrons between 2036 and 2040.
2. If we go by HAL's promises (which is an insanely optimistic thing to do, but I'll cover that in a bit), Tejas Mk 1A production is to be scaled up to 16 by 2025-26, and up to 24 by 2028-29. Even if those numbers are achieved, and we assume HAL will deliver 8 aircraft in 2024-25 (that is, by the end of March next year), the 180 Tejas Mk 1As (83+97) will only be delivered in 2033-34. Note that this figure assumes that the stated production numbers are achieved and capacity for other projects such as the Tejas Mk 2 and AMCA are completely independent. This won't be the case, so we shall take this into account.
3. If Tejas Mk 2 production starts in 2031-32, and HAL can deliver 8 jets a year till 2033-34 and 16 in 2034-35 (both overly optimistic), by 2034-35, we would have 40 aircraft.
4. Therefore, combining Points 2 and 3, we see that by 2034-35 (that is, the year when the last Jaguar squadron would be planned for retirement), we would have 180 Tejas Mk 1As and 40 Tejas Mk 2s. That makes for 10-11 active squadrons. Compared to today, we have retired 8 squadrons. Therefore, the IAF would now be at 32-33 squadrons, far short of the 42 squadron target.
5. Let's further assume that the conclusion of Tejas Mk 1A production allows for one line (8 aircraft) to be switched over to the Tejas Mk 2, with the remaining two lines going to AMCA. This would allow for 24 Tejas Mk 2 aircraft to be built from 2036-37. Let's also assume AMCA production starts at 8 aircraft in 2034-35, and scales up to 16 from 2036-37.
6. By 2040, when the last of the Mirage 2000s and MiG-29s have left service, we now have a further (as compared to 2034-35) 122 Tejas Mk 2 and 80 AMCA. That makes for 10 active squadrons. This puts the IAF at 37-38 squadrons by 2040, which is still short of the 42 squadron target.
7. Assuming Tejas Mk 2 production caps at 200 aircraft, production would cease in 2042. By that point, we would have a further (as compared to 2040) 32-40 AMCA. That puts the IAF at 41-42 squadrons, which is barely scratching the target.
8. By the early 2040s, the Su-30MKI would be nearing the end of its lifespan, and retirements would start around 2043 (to allow for 1 squadron to be retired each year, for a final retirement in 2055). Thus, the 42 squadron target would only sustainably be achieved in the late 2040s.

Based on the above points, it is clear that indigenous production (even at its most optimistic) may well not be enough. That is to say nothing about the calls to increase that target to 51-60 squadrons to account for the increased strength of the Air Forces of China and Bhikaristan.

Now, coming to practical considerations (as I referred to above):

A. HAL's claims are not sustainable for the simple reason that putting those capacities together would reach 32 aircraft a year by the start of the 2030s, and would further increase to 56 aircraft a year by 2036 (adding TEDBF production).

B. Engine bottleneck concerns, be it for F404 deliveries or for local manufacturing of the F414 or the 110 kN engine, have not been considered here. To manufacture 54 aircraft a year by the late 2030s or early 2040s, we would need 120+ engines (80 for the 40 twin-engined aircraft + 24 for the 24 single-engined aircraft + spares for the IAF). That is a very massive capacity requirement.

A more realistic estimate would be to assume a (still optimistic) 75% production efficiency for HAL. That would mean Tejas Mk 1A production would cease in 2036-37, Tejas Mk 2 production would cease in 2046-47, and AMCA would reach 168 aircraft by 2047, with TEDBF production standing at 108 by that point. That puts us at 42 squadrons in total by 2047, taking into consideration Su-30MKI retirement.

Now, coming to the cost aspects: The Rafale is a very expensive fighter, and we know for a fact that local production does tend to cost more. However, as evident by the numbers presented above, we really do not have any alternative to MRFA. This is a bullet we must bite, like it or not. If we take an aircraft other than the Rafale for MRFA (say, the F-21) for lower costs, we face the problem that we are facing with the Mirage 2000 today: Difficulty in sourcing spares.

Like it or not, this is a bullet we must bite for the costs, unless we are willing to take the aforementioned logistical headache 20 years down the line.

Excellent commentary. Further, with regard to cost, it may be noted that $25 billion for 114 aircrafts will not have to be paid in one go, but will be spread over several years. After we sign the contract for local production, at least three years will be needed to set up the assembly line and the first aircraft will roll out only after four or five years after contract. Assuming 16 aircrafts per year capacity, it will take 7 years to produce 114 aircrafts, after the first aircraft is rolled out. That means, this $25 billion will be paid over a period of 5+7=12 years. That works out to be, on average, an allocation of $2 billion approx from IAF capita acquisition budget under head of aircraft and aero engines. IN 2024, our allocation under capital acquisition budget for IAF aircraft and aero engine is Rs. 40,000 crores+, or $ 5 billion approx. Further, if we maintain a GDP growth rate of 6-7%, and maintain a defence budget of around 2% of GDP, then, this capital budget is also expected to grow at a rate of 6-7% per year in USD term. Therefore, the budgetary stress will not be as severe as it is being made out to be.

 

[desigandu]

We should buy only 114 rafales .because we already 36 and 26 for navy is already selected. F35 is a complete failure
No country has purchased f35. F15 ex is a 4th gem fighter with large rcs. And make in india more important than the security of the country. Except f22 no fighter can match rafales.

FYI - eventually there may be 2500+ F-35s (there are more than 1000 flying today) flying around globally with US and its allies...I think India should reduce MRFA and also buy F-35s A/B/C all versions for IAF and IN carriers (and LPDs), while cancelling TEDBF.

 

[Sudha]

Absolute best not to waste money on expensive foreign 4th gen platform, better to cancel MRFA and add more hangers in HAL to make more 4th Gen MK2's, at the most another 36 Rafale's could be bought off the shelf, even that would cost $10Bln.

Adding more hangars in HAL will not make any difference. They will deliver as usual in a snail's pace.

 

[Sudha]

Biggest blunder done by the government when we settled for 36 Rafale fighters instead of the 126 TOT transfer and local manufacturing.

Everyone knows the story behind that, HAL's productivity. So chill.

 

[Sudha]

Just purchase the technology of SU-57 & make 200-300 in India. Baat khatam. Koi jhig jhig hi nahi. AMCA,ORCA,TEDBF,MK I,MK II jab banega tab banega.... Yeh Western Countries kaa bahut natak jhelna padtay. Spares nahi, political angle, USA ko khush rakho. England ko Yes Sir, Yes Sir bolte raho. Upar se UN bolte rehta hai Kashmir Human rights, human rights.
Seedha SU-57, SU-75, MiG-41 assembly line establish karo India mein game khallas! 😎.
Barabar hai????? 15-4-2024 🙏🙏

Bharat's game khallas, khatham if anyone follows your advise.

 

[Ragu]

My suggestion is buying 3 squadron of F15Ex directly from Boeing and in the deal asking them to start a plant Boeing X-32 stealth fighter in India.
AMCA is still 20 years away. We can't buy F35. So runner-up X-32 is the most viable option, provided USA agreed to share stealth Technology.

Yes BUYING F15 EX IS BEST OF INDIA ,IN 2/3SQUADONS
MAY BE F35 WOULD ALSO BE GOOD OPTION CONSIDERING THIER LOW COSTS COMPARED TO RAFAEL

 

[Lal M Khaidem]

We have to accept it that we can't make a 5th Generation fighter. Even if the design is viable then also HAL does not have technical expertise to absorb it ! Only viable option is asking a foreign help. China is out of question. Europe doesn't have the technology. Russian one is not true stealth. Now left with USA.
Only Boeing can share technology but they will ask price for it. Lockheed can't share technology as they have agreement with USA government.
We need foreign help for AMCA. Otherwise it will be still born

The Sentence "China is out of question" shows your ignorance. China doesn't have a 5th gen fighter as of now.. period.. If you believe J20 is a 5th gen fighter then you would probably be the only person in the world to believe that

 

[AK S]

Adding more hangars in HAL will not make any difference. They will deliver as usual in a snail's pace.

Great analysis.

So we should give $25B to France and hope maybe beg to get first fighter by 2030? MK2 might be very close to IOC by then.

Writing is on the wall … if it hasn’t happen in 20 years, it won’t happen anytime soon. Even RFP is not happening before first flight of Mk2 and AMCA. Thereafter a considered call will be taken - if indigenous options deliver on the promise, MRFA is dead.