French aerospace company Dassault Aviation is considering setting up a final assembly line (FAL) for its Rafale fighter jets in India, a move that could significantly impact India's defense manufacturing capabilities.
This development, initially reported by the French publication L'Usine Nouvelle, comes in response to growing international demand for the Rafale and anticipated large-scale orders from India.
Dassault Aviation's CEO, Éric Trappier, indicated that the potential assembly line is a strategic response to India's plans for substantial defense acquisitions. He stated that India is planning large orders, and establishing a local assembly line could help manage this increased production demand.
The Rafale, a 4.5-generation multirole fighter aircraft, is known for its adaptability and sophisticated electronic systems. Dassault has previously supplied 36 Rafales to India under a 2016 contract valued at approximately €7.87 billion (around $9.4 billion), with all deliveries completed by 2022.
Currently, the Indian Air Force (IAF) is considering further acquisitions to address a significant operational deficit. The Indian Air Force is currently short of its requirement. Concurrently, the Indian Navy is nearing the completion of a deal to acquire 26 Rafale Marine fighter jets for deployment on the INS Vikrant aircraft carrier.
These potential Indian orders, combined with existing contracts from countries like Egypt, Qatar, and the United Arab Emirates, are prompting Dassault to increase production beyond its current capabilities. The Mérignac facility in France Currently, Produces one to two aircraft per month.
Creating a final assembly line in India offers a practical solution to these manufacturing pressures. Dassault has already established a presence in India through the Dassault Reliance Aerospace Limited (DRAL) joint venture, located in Nagpur. This facility currently manufactures parts for the Rafale, such as sections of the fuselage and wings.
A full assembly line would represent a major expansion of this partnership, potentially involving the assembly of complete aircraft from kits imported from France. This model is similar to how Lockheed Martin operates F-16 production lines in countries like Turkey and South Korea.
This initiative presents both economic and strategic advantages. If the Indian Air Force selects the Rafale for its Multi-Role Fighter Aircraft (MRFA) tender, which calls for 114 jets, India's potential orders could surpass 100 additional aircraft. Local assembly could lead to cost savings, leveraging India's comparatively lower labor costs.
Furthermore, Indian Labor rates are 20-30% of European levels. It would also help avoid supply chain issues affecting Europe, including shortages of materials like titanium and electronic components. For India, it offers the benefits of job creation, technology transfer, and a strengthened defense industrial base. This is particularly crucial as the IAF aims to reach 450 jets by 2040, all while the ageing MiG-21s and Jaguars being phased out of service.
Dassault's pre-existing support network in India, including maintenance facilities and a spare parts supply chain, would facilitate the operation of a new assembly line. The company's previous successful navigation of India's complex procurement procedures in the 2016 deal also gives it an advantage over competitors in the MRFA competition, such as Boeing's F/A-18 or Russia's Su-35. The IAF's existing operational experience with the Rafale further strengthens Dassault's position.
Increasing production, however, presents challenges. Dassault aims to increase the output of its Mérignac plant to three Rafales per month by 2026, but ongoing supply chain difficulties, worsened by the COVID-19 pandemic and sanctions against Russia, remain a concern.
Furthermore, establishing an Indian assembly line, with an estimated cost of $500-700 million, would require a significant investment and take an estimated three to five years to become fully operational. This process would involve training skilled workers and obtaining necessary regulatory clearances. According to industry analysis, establishing a new assembly line involves several phases: site selection, infrastructure development, workforce training, technology transfer, and certification.
