India Tackles $10B Fighter
Our colleague Manu Sood, editor of the Indian defense website 8ak.in covers the impending $10 billion deal for the Indian Air Force’s new multi-role aircraft.
While it’s too soon to predict a likely winner for India’s huge competition for 126 Medium Multi-Role Combat Aircraft (MMRCA), the first indicators should be out as early as the next week when the technical evaluation committee’s report comes out.
Reports state that this deal for 126 fighters will cost $10 billion, but there exist huge price variances between the offered fighters of varying capability. And this figure is a lifecycle cost – not an acquisition cost — so it is not clear if the number of fighters is fixed or whether the budget figure is. Half the fighters would not qualify even before going in to trials depending on the answer.
This is the first indication of the general confusion in the competition. The second is why a single engine aircraft with a 1970’s airframe is in the same competition as the most modern and expensive twin engine heavy hitter. The Indian Ministry of Defense has drafted the tender so broadly that most fighters would qualify. But this lackadaisical attitude will cost competitors hundreds of millions of dollars when they compete but fail. One competitor told 8ak that the competition could cost each bidder an average of $180 million given costs such as each bomb drop in live weapons’ trials could cost up to US$1 million.
Already there are reports that some competitors have failed to meet requirements in the early stages of the competition. On Mar 26, Shiv Aroor reported that four contenders failed their high altitude tests in Leh. This has not been since confirmed. Certainly, no contender has given signs of withdrawing from the competition.
For all its drawbacks, the competition is transparent. If any vendor is kicked out, India will have to give explicit reasons for which part of the tests it failed. So even if the IAF did not want a particular aircraft, if all the tick boxes were checked, no company can be eliminated at this stage even if they have no chance of eventually winning.
The threat driving the competition is a two-front war with Pakistan and China. With both states having nuclear weapons a deep-penetration strike is virtually ruled-out as per Brig Kanwal of CLAWS (Centre for Land Warfare Studies) since it would risk over-flying an enemy’s secret nuclear installations. He further says that there is an 80 percent to 90 percent probability that the next war will break out in the mountains and at least a 60 percent probability that the next war will remain limited to the mountains. In this scenario, the requirement of extended range is minimal.
With advances in technology, the fighter itself is losing importance and fast becoming a carrier for equipment such as AESA radars, sophisticated missiles and electronic warfare equipment. With miniaturization similar capabilities can be built in to smaller, lighter planes.
At the top-end, India has already made a choice, the Sukhois for which no tender is required. With delays in the indigenous Light Combat Aircraft Tejas project, buying another top-end fighter would mean that the IAF would be too top-heavy. Facing the prospect of a two-front war, large coverage area and the dwindling fleet (32 squadrons of 12 to 18 fighters versus a minimum of 39.5 sanctioned by the government) it is clear that the IAF needs a high number of planes to cover more areas and to deliver more sorties.
Given the above it looks as if a cheaper fighter will best suit India’s limited budget. This bends the odds in favor of single-engine competitors or the Russians, who are expected to offer the MiG-35 at a cheap price.
Things to note. This is the first IAF tender where life cycle costs will be considered, but MoD officials complain that this may not be possible for some of the players whose aircraft have very short service histories. With limited skills to evaluate such technically complex calculations, MoD may put a higher weight back to the initial price though this may just be a negotiating tactic.
It is common in Indian procurement programs for the services role to be limited to conducting tests. For the most part, the Ministry of Defense makes the decision. The bigger the deal, the more likely it is that Parliament and the government will weigh in. One source told 8ak that it would be best for the IAF to tell MoD which fighters they do not want and then let the government make a political decision.
Nobody can read the mind of the Indian government when it comes to politics. But here is our analysis.
The continuing strength of the Russian-India relationship has repeatedly surprised everyone. In a pure political face-off it is unlikely that any country would be able to outmaneuver Russia. If the past is Russian and the future (limited joint-development of Fifth Generation Fighter Aircraft) is Russian, then from a training, spares, infrastructure and familiarity perspective it makes sense to stay with the Russians.
The U.S. often has the best technologies but arms export restrictions can counterbalance the technology advantages. In a war with either Pakistan or China India cannot risk a situation where the U.S. might withhold support of spares or otherwise try to influence India’s behavior. However, the lure of U.S. backing India for a UN Security Council seat is quite lucrative and in a July 2010 report by senior Pentagon official Michele Flournoy made it clear that the U.S. is putting a lot of strategic value on the fighter aircraft deal and has made it clear that they would like to see a U.S. choice. This was backed by the US Navy putting its support behind the Super Hornet for India.
France has recently, virtually given up on sales to Pakistan and thereby made a strong commitment to India that will not go unnoticed. While they are a more reliable defense partner than the US, they are prone to mind-numbing price increases as witnessed in the Scorpene and more recent Turbomeca/HAL deals. EADS has pointed out that it is actually supported by a consortium of four countries plus France but Indian analysts believe that India would have little influence over a consortium and hence their political value is diminished.
The key drawback with the Gripen is that Sweden is seen as the least politically influential country. But there is a catch! What is and should be most important to India, possibly even more than international politics is to build indigenous capabilities. Saab’s Asia Pacific head Jan Widerstrom has pointed out that for a large US military supplier $10 billion spread out over decades is not a very big contract. But for Saab, with Euro 3 billion in annual sales, this would shift the company’s interests to India. This is supported by Par Rohmann, the head of the technology transfer programs, who says Saab would co-develop critical technologies with India. But the Gripen uses a U.S. engine and many other components, which could allow the U.S. to play spoilsport.
Corruption continues to be a huge problem in military deals here. Despite both Defense Minister A.K. Antony and the Prime Minister having squeaky clean images, corruption in India has reached very serious levels.
It is 8ak’s expectation that the final selection will be purely politics and will not be based on cost. Russia may have been eased out and US is in danger that its restrictive policies may become unpalatable in India. Eurofighter and Rafale are great platforms. If cost was not an issue, then these would win. But cost and numbers are an issue so, if Saab pushes hard enough, you never know. And that is the current prediction. You never know.
