Indian Defence Review

In the first week of April 2018, Ministry of Defence issued an RFI (Request for Information) to fighter aircraft manufacturers including the six companies that took part in Original MMRCA (Medium Multi Role Combat Aircraft) contest of 2007. MoD intends to buy an all –weather, multi role combat air craft that can undertake (i) Air Superiority, (ii) Air Defence (iii) Air to Surface (iv) Reconnaissance (v) Maritime and (vi) Electronic Warfare, buddy refuelling etc operations.

RFI is for 110 fighter Aircraft for the IAF, 15% of the fighters (around 16 in number) will be purchased in flyaway condition and rest 85% would be made in India by a Strategic partner/Indian production Agency. 75% of 110 Aircraft would be single seat aircraft and rest will be twin seat. Different analysts and publications are calculating the cost of 100 Aircraft to be around USD 15 billion!

The burden of history: –

MMRCA: In 2007, MoD issued a tender to purchase 126 fighter jets under the MMRCA procurement programme. Six participant fighters were Lockheed Martin F-16 (the USA), Boeing F/A-18E/F Super Hornet (the USA), Mikhoyan MiG 35 (Russia), Dassault Rafale(France), Eurofighter Typhoon (European consortium of Airbus, BAE Systems and Leonardo)and SAAB JAS 39 Gripen (Sweden). These fighters were tested at sea level, extremely hot and cold weathers for over 600 parameters.

As a result of the thorough testing, IAF shortlisted Rafale and Eurofighter in Jan 2012. MoD started negotiations with Dassault because it was the lowest bidder (L1) among the two finalists but could not strike a deal because of various reasons like cost, implementation of 50% offset clause, ToT etc. Dassault raised the concern that India lacked the technological base to absorb the ToT and Dassault did not want to be held responsible for the quality and serviceability of the Rafales manufactured in India. Finally, on 30thJuly 2015 MoD withdrew the MMRCA tender and Keeping in mind the critical operational necessity of fighter aircraft, a deal was signed for 36 Rafale for roughly €7.87 billion in Sep 2016. The decision to buy 36 Rafales was a hasty decision taken during PM Modi’s visit to Paris in 2016.

Delivery of 36 Rafales will start from Sep 2019 and the entire fleet will be delivered with-in 67 weeks of signing the deal. 28 of them will be the single seat and 8 will be dual-seat (trainer) Aircraft. Soon after signing the deal, a senior political leader in the National Democratic Alliancegave the break-up of the total amount to few journalists in an off-the-record briefing. GoI will pay €3.3 billion for 36 fighters, €1.7 billion for modification required by the IAF, €700 million for weaponry, €1.8 billion for spare parts and engines and €350 million for the ‘performance-based logistics’, which will ensure that at least 75% of the Rafale fleet remains operationally available. One of the major advantage extracted from this deal was using the offset clause in getting the French engine giant Snecma to fix the indigenous Kaveri engine.

Single Engine Fighter (SEF):  To address the declining squadron strength issue of the IAF, MoD then launched Single Engine Fighter (SEF) aircraft procurement program. Purpose of this program was to procure 100+ light fighter Aircraft for the IAF. There were two reasons cited for this procurement – (i) to save cost as 126 Rafales were to cost around €15 billion and (ii) to setup a parallel production line of a light single engine aircraft that, along with LCA Tejas, will increase the number of fighters joining the IAF every year.

Only F16 and Gripen were two suitable planes under this category and both were pitching aggressively. Both companies were making their offer more and more lucrative. Mig-35 also tried hard to come back in the race.

But then came the news of Qatar exercising the option to place a follow-on order of 12 Rafales for €1.1 billion (almost same as India paid for just the fighters i.e. €3.3 billion for 36 fighters). In 2015, Qatar had signed a contract of €6.3 billion for 24 Rafales with MBDA Meteor long-range and Scalp cruise missiles. Ignoring the fact that Qatar’s 2017 order was a follow-on order, opposition political parties started targeting the government for possible corruption.

Nonetheless, the political battle ensued appear to have an impact on the government’s decision to drop the Single Engine fighter procurement. Because there were just two main contenders (F16 and Gripen), the government may face similar corruption allegations in future. Hence walking on the ex-Defence Minister A.K. Antony’s footsteps, MoD dropped the procurement program and started a new procurement program earlier this month. Hence the new RFI, which has no limitation of Single Engine, hence there will be more contestants.

What message does it convey to the world?

No long term planning: – One more time, it proved that India has no vision as far as defence preparedness is concerned. We have no long term planning and the armed forces have little or no say in the procurement decision making. We can invest 10 years in MMRCA contest, take hasty decisions like buying 36 Rafales citing one reason or another and just after 2 years, ignoring the same reason(s) we can restart the contest again.

Citing high cost of the deal (appx. €15 Billion for 126 Rafales), we purchased 36 Rafales for roughly €7.87 billion and now we are willing to spend $10-$15 billion for 110 aircraft! Won’t it defy the basic logic of withdrawing the MMRCA? Why did we spend €7.87 billion on just 36 Rafales? We will end up spending €20 billion for 146 Aircraft of two different categories, so how will the new procurement program save money? Are we giving any importance to IAF’s logistic, maintenance and operational impact of such decisions?

Fragile procurement process and weak leadership: It is easier to sabotage any procurement program in India. All it needs is some aggressive media coverage, which will trigger a political spat. Concerned responsible authorities will panic and close any procurement program. During UPA government, it was rumoured that the then Defence Minister A.K. Anthony had instructed the ministry to shut down any procurement program if any corruption allegations surface. Ministry would not conduct any inquiry and would just restart the program. The over-cautious approach caused serious delays in the procurement, hampered the decision making (and defence preparedness) and frustrated the OEMs, who had spent the time and the energy for years just to get the doors banged on their face for no obvious reason. MoD banned almost half of the defence manufacturer of the world. All this was done to avoid any new Bofors like scandal. The then Defence Minister successfully did that but at the cost of defence preparedness of the country. Current Defence Minister seems to be doing somewhat the same. Momentary dynamism infused by Manohar Parrikar is fading away.

IAF’s preparedness: – Arming its armed forces with required equipment is not there on our priority list. IAF is the real loser in this political game and has been forced on the path of losing more squadrons over the next decade. 10 years of efforts are already wasted in the form of MMRCA competition that gave IAF just 36 Rafales. Tejas was inducted into the IAF on 1st July 2016 with only 2 Aircraft. HAL promised to deliver 8 Aircraft in the first year but after almost two years, Tejas LSP-8 and LSP-9 just flew for the first time in Mar 2018.Though IAF has committed for 123 Tejas but looking at the progress rate, no one knows when those Aircraft will join the IAF.DRDO-HAL’s AMCA (Advanced Medium Combat Aircraft) is still in design phase. IAF had serious reservations about the stealth features and cost of the FGFA (Fifth Generation fighter aircraft) from Russia. International media like The Diplomat, Janes have already announced India’s withdrawal from the FGFA programme.

Apart from 36 Rafales, the remaining 25-30 Su-30 MKIs that HAL will deliver by early 2020 and an unknown number of Tejas, the only possible inductee in the IAF might be 21 second hand Mig-29 that Russia is offering at a price which is almost 30% of the cost of a new Mig-29.

On the other hand, IAF is all set to decommission around 11 Squadrons of Mig-21 and Mig-27 by 2022 – roughly 180-200 Aircraft. By early 2030s, it will also decommission its Jaguar and Mig-29s – another 160 fighters. Hence in the next decade, the number of Aircraft joining IAF will be far less than the outgoing Aircraft. Though the incoming Aircraft will be technologically superior, numerical strength will be a pain area for IAF’s planners because we are talking about two front war. If we just have to tackle Pakistan or China, IAF is more than ready to do so but two-front war scenario will divide the assets in not-so mutually supported battlefields.

In recently conducted massive exercise – Gagan Shakti, IAF used 1100 Aircraft to validate its concepts to operate in all kind of terrain – desert, high altitude, special operation and maritime (in both eastern and western sea boards). But it did not exercise an exact two front war scenario. Because it could not have, IAF lacks the number to do so. During the first phase of Gagan Shakti, it focused on Western border and then shifted to Eastern border. In a real two front war scenario, will we get a week’s time to neutralize Pakistani forces and shift our assets to face China?

Current procurement program: 

Rest of the write up will discuss the current procurement plan and various options MoD and IAF have. Let us first understand the main objectives of original MMRCA, Single Engine Fighter (SEF) programs and the current RFI.

In the original planning, LCA Tejas was to replace the main stay of the IAF – Mig-21. MMRCA was launched to fill up the technological/operational gap between home grown LCA and heavy fighter – Su-30MKI, in a substantial number, hence the requirement of 126 Aircraft.

When MoD scrapped the MMRCA and signed 36 Rafale contract in 2016, SEF program was launched to boost the IAF’s squadron strength with a less expensive single engine fighter aircraft, which was to be manufactured in India. Another major objective of the SEF was to create a local defence industrial base with the Private partnership. This would have given an acute sense of competition to HAL, which is the only Indian company experienced in this field and enjoys the monopoly – the main reason for its poor performance.

GoI’s main objectives of the current procurement program are still the same

•  Getting 110 fighter aircraft for IAF

•  Technology transfer to boost domestic aviation industry and

•  Local production to create more jobs.

Hopefully, all six contenders will be back in the field again. If there is no new contestant in the race, then the technical evaluation will not take a long time. Among the six contestants, F16, Gripen, Rafale and F/A-18 will most likely have the second bit at the apple. The reasons are explained in the later part of the write up. It will not be the individual potential of the aircraft that will decide the winner. The main deciding factors will be

•  Make-in India (to create jobs)

•  ToT that will boast domestic defence industrial base,

•  Geopolitics

•  Cost.

Make-in-India:  All the OEMs are ready to fulfil this condition. F-16’s production line in the US will remain active for next three years, thanks to Bahain’s order of 16 F-16 Block 70 Aircraft. Lockheed will happily transfer that to India. In June 2017, it signed an agreement with Tata Advanced System Limited (TASL) to create a production line in India (if the need arises). SAAB is associated with a lot of Indian public/private entities and has better stats to show to prove its intentions to keep making and developing in India. It is providing Integrated Defensive Aids Suite (IDAS) and integrated electronic warfare self-protection system for the Indian Advanced Light Helicopter (ALH) to HAL, developing RIGS heads-up display with Simtel, establishing SAAB India Tech Center with Mahindra, working with CIM Tools Pvt Ltd to manufacture machine components, working with BEL to deliver Costal Surveillance system to Directorate General of Lighthouses and Lightships (DGLL) etc. With Pipavav Offshore and Defence Engineering Ltd., SAAB has formed a group called Combat System Engineering Group (CSEG) and is working with Kalyani and Ashok Leyland on SRSAM/mobility vehicles. SAAB will be more than happy to transfer Gripen’s production line to India in a bid to grab the biggest order of their history.

Boeing and Rafale are also not left out in this domain. Both have been associated with Indian Public/Private companies for a long time and will agree to make their fighters in India.

ToT:  It is a grey area -something that can be negotiated or worked upon. It was one of the show stoppers during the Rafale deal. No country will like to do 100% ToT, doing it would mean losing their customer with a big fat valet, forever. Delaying India’s technological advancement in critical components like engine, AESA radar, weaponry, DVI (Direct Voice Input – the plane will obey to pilots verbal commands) etc is in the best interest of the selling country – It will help retaining their customer (India) for maximum possible time.

Our ToT negotiation thus should be hard, focused and little flexible as well. We need to get as much technology transferred as possible, while getting a local Public-Private base ready to absorb the incoming technology. Local absorption of the technology is a very crucial part and needs to be monitored closely so that the absorbing body (Public or Private entity) can build the base for future development. Else ToT will lose its sole purpose. Permanent job creation would also depend on this factor. We must learn from PSU’s experience. HCL will deliver all the Su-30 MKIs to the IAF by March 2020 and its skilled work force will then be waiting for overhaul orders of the Sukhoi fleet. Had HAL used its skills, energy, technology transfer and opportunities properly, it would not have been struggling with FOC of Tejas, Tejas Mk1A, AMCA etc.

If direct ToT becomes show-stopper, we should use ToT/Offset clause to fix/upgrade our indigenous projects – like the French assistance to fix the Kaveri engine.

Geopolitics: Geopolitics will play a major role in finalizing the contract. Every country will try their best to grab the deal, especially the United States. Following Donald Trump’s America First policy, to balance the trade deficit ($22 billion in 2017), US is already mounting pressure by imposing duties, tightening visa regulations, moving to WTO on subsidy matter etc. The US will not leave any stone unturned to grab the contract. But we must finalize the plane considering our national interests. If we succumb to the US pressure, it will not only encourage the US to arm twist us again but will also increase our dependence on Uncle Sam, which will ultimately affect our foreign and defence policy.

On the other hand, we can also use such deal (s) to our gains like membership to NSG etc. The US has a great international influence that we can utilize but it should not be at the cost of IAF’s current and future needs. In comparison, French is not as influential as the US but far better than the Swedes.

Cost – Starting with MMRCA, MoD has been asking for a proposal that would cover total life cycle cost of the weapon platform. Considering the rapid decommissioning rate of IAF in the near future, we must give preference to the IAF’s operational readiness and domestic industry’s interest over the cost factor. This will better serve our short and long term national interests. But in total contrast, the MoD will most likely give maximum weightage to the cost factor.

Options available:

IAF needs an aircraft in substantial number that is capable of achieving its military objectives and can qualitatively balance the outgoing Aircraft in the next decade, while retaining the technological edge for next 3-4 decades. From operational stand point, any of the six Aircraft would serve IAF’s purpose. The objective here is not to compare their potential in terms of weapons and sensor but to see beyond that. Evaluating each contestant on the four factors stated above will help us find best options for the IAF.

•  Eurofighter typhoon is comparatively new aircraft, was developed in the late 80s and flew for the first time in 1994. It is least likely to make it to the negotiation table because it is a hi-tech and costly machine. Because we have already placed an order of 36 Rafales, getting Typhoons in IAF’s ranks will make no operational or business sense. It has nothing in common with what IAF is currently using. Typhoon comes with EUROJET EJ200 series engines, Euroradar CAPTOR, avionics and weaponry. It will add one more type of Aircraft in IAF’s inventory and will increase IAF’s maintenance load. Getting more Rafales instead, will make more sense.

•  Mig-35 is based on the successful Mig-29 aircraft. During MMRCA, Mikhoyan reportedly did not send Mig-35 to India for testing. Looks like Russia got upset when its primary customer started looking elsewhere for fighter Aircraft. In any case, Mig-35 does not provide any noticeable technological advancement. Comparing it with Mig-29 UPG, its engines (RD-33 MKB) offer 7% more thrust, can come with Zhuk-MA AESA radar and a simple cockpit fitted with three LCD screens. All these noticeable changes can be incorporated in the Mig-29s. Considering IAF’s successful history of integrating weaponry and sensors from different partsof the world into one aircraft, the task is not that difficult. And Mikhoyan poor after sales service, spares availability and serviceability record of Mig series Aircraft will go against it.

American Aircraft:

•  Boeing F/A-18 Super Hornet– Super Hornet first flew in 1995 and most likely, Boeing will field its most advanced version – F/A-18 Block III Super Hornet. IAF is not operating any fighter of US origin. Hence any plane from the United States will come with a new set of logistic, maintenance and operational challenges. Both F18 and F16 have nothing in common with what IAF is currently using. F/A-18 Block III will come with GE’s F414 engine, Raytheon’s AESA radar, Block II IRST sensor, AN/ALQ-214 Integrated Defensive Electronic Countermeasures (IDECM) Block IV suite suits, Tactical Targeting Network Technology (TTNT) data link and weaponry. All this will create unimaginable maintenance load on over stretched maintenance command of the IAF. But F/A -18 is also a contestant in Indian Navy’s plan to procure 57 carrier based fighters. Boeing will try its best to exploit it.

•  Lockheed Martin F-16 is the oldest among all the contestants. It is a legendary aircraft, more than 4500 are being flown by 28 nations, it has won many battles and has reserved its place in history as one of the best fighter aircraft ever produced. Its development started in 1972 and it first flew on 2nd fen 1972. Though its latest version (Block 70) will be on offer but would it be wise to induct an airframe that was designed and developed 50 years ago? And IAF will operate it for next 40 years! Just like F/A-18, it will come with a new set of GE or Pratt and Whitney engine, AESA Radar, data link, weaponry etc. creating a maintenance nightmare for the IAF.F-16 Block 70 uses MIL-STD-1773 and can be integrated with French/Israeli systems but it is unclear how willing Lockheed Martin will be to integrate systems from different countries in its plane.

ToT from either Boeing or LM will be a tough nut to crack. First they will not be willing to transfer key technologies like the engine, AESA radar, avionics etc. If it gets negotiated, US Congressional approval would become a showstopper. Obtaining necessary approvals will be used as a tool to arm twist India in other deals.

•  SAAB Gripen JAS-39  Gripen was developed in the 80s, it first flew in Dec 1988 and entered service with Swedish Air Force in 1993. It is an excellent machine with an American GE 414 engine (same engine that HAL will use in Tejas Mk II), Italian Selex Raven ES-05 AESA radar and American/French weaponry. Though its avionics are designed using MIL-STD-1553B and it can be integrated with French and Israeli weaponry, targeting pods, electronic warfare suites etc. IAF is already using French/Israeli systems and/or weaponry in Mirage, Jaguar, Su-30 and Tejas. SAAB is willing to make any changes required and will integrate French/Israeli systems, which will reduce the maintenance load of IAF considerably.

It is clear that SAAB has not much to transfer under ToT. Two main component (engine and radar) are not of Sweden. But considering the scale of the order, SAAB is willing to transfer technology, manufacturing and further joint development.

•  Dassault Rafale was developed in the 1980s and joined service in 2001. It is a costly machine but technologically superior to other 6 contestants. Dassault already has an order of 36 Aircraft for €7.87 billion. This will go in its favour, if French spice up their offer with ToT, co-development, Technological assistance programs, discount etc. It is important to note that Indian navy is hunting for 57 carrier based Aircraft and Rafale is one of the contestants there.

Gripen or F/16:

If MoD has added twin engine aircraft in the RFI just to avoid non-existent future corruption allegations, then MoD will pick either F16 or Gripen. Considering the cost, Gripen is the least expensive aircraft among the six fighters. F16 will be the next in line. But Geopolitics will be the deciding factor in such case, which is hugely in the favour of the USA. If F16 is shoved down IAF’s throat, then the IAF will be the real loser in that geopolitical game. Instead of a professional air force, it will become more of a museum that would be operating Aircraft originated from all corners of the globe.

In comparison, Gripen is far better aircraft than F-16 and Swedes will be more cooperative in ToT and future R&D. Though SAAB Gripenis currently using an American engine and an Italian AESA radar, once we have Kaveri engine fixed and it starts producing the desired thrust, SAAB can be asked to use Kaveri engine and Israeli Elta’s AESA radar (same radar that IAF used to upgrade Jaguar last year). This will address a major concern of two main component of foreign origin in Gripen and also help in standardization of engine and AESA radar in IAF’s inventory. What guarantees do we have that the Americans will transfer engine and radar tech to us. With Swedes, we will be on the negotiation table with a position of strength and will be able to negotiate the whole package in our best interest.  Americans on the other hand (if F16 is selected) will start un-ending arm twisting.

Better Choice:

But the best option is still Rafale. Let me explain how?

Cost/Benefit Ratio: Rafale is the most advanced and potent machine of all six contestants and it EW capabilities are outstanding. But just 36 aircraft will not make any operational or business sense. We have already earmarked two airbases (one for each Squadron) that would be prepared under the original deal of 2016. Those two bases can handle at least 2-3 more squadron. This way we will pay just for the aircraft, their customization and the weaponry. A total 90 Rafales will give a great qualitative edge to the IAF along with a decent number (with 75% serviceability).

And it will not be wise if we see IAF’s 110 aircraft and IN need of 57 aircraft in isolation. There are just two contestants of Navy’s 57 fighters contest – F/A- 18 and Rafale. If we select Rafale for the Indian Navy as well, then combined potential of the IAF and the IN will be a force to reckon with. This will improve inter-operational cooperation and reduce maintenance load. The total cost of operating the combined fleet of Rafale will be less than the cost of operating 36 Rafales, the IAF’s 110 fighters and the IN’s 57 fighters. Dealing with one foreign vendor will be far easier to get timely deliveries, after sale service, ToT, local production etc.

ToT and Make-in-India:  A combined bigger order will allow MoD to negotiate the deal from a position of strength. We would be able to either get the technology transferred or to get French assistance to get an improved version of our indigenous AESA radar (Uttam), DVI (Direct Voice Input), sensors, EW suits etc. Once we have Kaveri engine (with better output) and Uttam radar fixed/upgraded, the IAF can start working on standardizing these two key components in its inventory. This will also pave way for the early development of the AMCA.

Just like Kaveri engine, we can get French assistance regarding FOC of Tejas and to setup its parallel production line with a private partner (which will be run totally by Indian private company). This is the need of the hour to boost the numerical strength and speed up development of its Mk1A and Mk2 versions. So far, HAL could deliver just half the promised LCAs. A private production line will not only increase the number of LCAs joining the IAF but will give a much needed sense of competition to the HAL.

Such approach will streamline the type of fighters operated by the IAF in next 1-2 decades. By 2030s IAF will have LCA Tejas (Mk1A/Mk2), AMCA, Rafales and Sukhoi 30-MKI. Just four types of fighters!

We need to understand that no country will help us in developing an advance fighter and we just don’t have to reinvent the wheel. We can use a huge order to get expert assistance to fix/upgrade indigenous projects of key components. If we have a high power parliamentary/bureaucratic committee or an autonomous body overlooking coordination with just one foreign vendor, domestic public and private entities and the end users (IAF and IN) and ruthlessly make each party accountable, we will have huge chances of successfully achieve all the goals envisaged – a bright future for domestic aviation industry and the IAF. It is a gigantic task but there are no simple solutions to complex problems.