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France agreed to provide 50 percent offsets to India for Rafale fighter sale


Jul 06, 2016 00:59 UTC by Defense Industry Daily staff

France has agreed to provide 50 percent offsets to India as part of its Rafale fighter sale to the Indian Air Force. The Paris concession comes as the government aims to have the fighter’s engine manufacturer, Safran, take over and complete the development of India’s Kaveri turbofan engine. This will see an investment to the tune of $1.1 billion poured into the Kaveri project which engineers say needs 25-30 percent more research to see it to completion.


There are conflicting news from both camps!

France offers EUR 1 billion to revive India’s combat jet engine project

Sources said that since January, several rounds of discussions have taken place between Indian authorities and French company Safran, which developed the M88 engine that powers the Rafale as well as the Shakti engine for Indian advanced light helicopters.

French experts who assessed the Kaveri engine — which was more or less abandoned for aviation use in 2014 due to shortcomings on power —indicated that 25-30% more work would be needed to make it flight-worthy.

The air force is committed to buying at least 80 of the LCA Mk 1 A fighters that will meet higher technical requirements than the version inducted this year. It is currently powered by GE 404 engines.

“The proposal is to have the Kaveri ready for the next version of the LCA that would then boast of an indigenous engine as well. The French are confident that this can be done and are willing to put in money into the project,” a person involved in the discussion said.

France Imposes New Conditions on Rafale Deal With India

, Defense News12:04 p.m. EDT July 6, 2016

NEW DELHI — France has quietly insisted that an $8.9 billion government-to-government (G2G) deal with India be signed before a 50 percent offset deal for Rafale fighters is finalized, according to a French Embassy source in India.

“We have concluded multiple discussions with state-owned Defence Research and Development Organisation (DRDO) and other agencies to execute 30 percent offsets in India’s ongoing and futuristic military aerospace programs, but no [offset] deal will be finalized until the final Rafale contract is signed,” said the source, who spoke on condition of anonymity.

As part of the Rafale deal, France has made a 30 percent offset commitment for military aerospace research and development programs and a 20 percent offset commitment for making components for Rafale fighters with domestic firms in India.

French defense companies Safran, Thales, MBDA and Dassault have also committed to proving stealth, radar, thrust vectoring for missiles technologies and materials for electronics to DRDO and domestic defense companies.

“We simply cannot make [Rafale] negotiations public”, said an Indian Ministry of Defence (MoD) procurement official, who also spoke on condition of anonymity.

As part of G2G discussions, France has also agreed to kick-start the unsuccessful Kaveri gas turbine jet engine for the homemade light combat aircraft Tejas.

At present, the Kaveri engine lacks sufficient power thrust, efficiency and dependability.

An upgraded Kaveri engine with 90 kN thrust can be developed in two years’ time with French cooperation, according to the French Embassy source.

Currently the Tejas is powered by a General Electric F404 engine.

“We have detailed discussions with the French teams to revive [the] Kaveri engine project and it is now for MoD to take a final call,” according to a senior DRDO scientist, who spoke on condition of anonymity.

Meanwhile, the MoD is yet to respond to the Indian Ministry of Law and Justice’s findings on the Inter-Governmental Agreement (IGA) on the Rafale deal, the MoD defense procurement official said.

Defense Minister Manohar Parrikar had informed the parliament May 3 that the federal ministry had reviewed the IGA and that the findings would be taken into account when finalizing the deal.

And prior to that, Dassault chairman Eric Trappier said in an April 13 radio report that he expected a contract could be signed “in the next few days,” adding: “I have high hopes this contract could be signed fairly quickly.”

The MoD procurement official said that no negotiations on the Rafale deal between France and India have taken place in more than six weeks, and the next meeting is yet to be scheduled.

In addition to 36 Rafale fighters, India is also buying Mica air-to-air missiles, Scalp air-to-ground missiles, Meteor beyond-visual-range missiles and precision-guided munitions at a cost of $1 billion for immediate requirements, and India is expected to order five years’ maintenance and engineering support at a cost of $500 million.

Related post:

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India to select fighter jet under ‘Make in India’ by March: Manohar Parikkar 

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