ldev wrote:Makes it easier for LM or Boeing to set up an assembly line in India and still keep "key technology" under their control. The product will be advertised as "Made in India" under the "Make in India" initiative. If LM can offer a "Made in India" F-16 at prices comparable to a Tejas, then MMRCA 2.0 could still take on a life of it's own.
By the way, FDI >49% was still available, not just under the "automatic approval" rule. So now 74% is possible under "automatic approval" and higher percentages with specific approval. Cuts out red tape up to 74%
The OEMs need a minimum order of 100 aircraft to transfer the production line to India. It does not make financial sense for them to do so otherwise. The NDA Govt will not sign a deal for 114 MRCA - for a minimum of $20 billion - during COVID. Neither will they do so, post COVID. There is no money for this anymore. One way to circumvent this hurdle would be to *NOT* have an assembly line in India and directly acquire fighters from the OEM (as the first 18 aircraft in the 114 contract has to be in fly away condition). In that scenario the offsets will be via components, but will obviously not include anything on the engine or the radar. It will also drastically reduce the cost of MMRCA 2.0 when fighters are acquired in fly-away condition.
Right now the focus is on fulfilling the contracts that are in limbo (i.e. 83 Tejas Mk1A order) and continuing the payments on the contracts that have been signed (the 36 Rafale order, the S-400 order, the MH-60R order, the four Krivak III vessels, etc). The next phase will be looking at acquisitions of foreign products, albeit in small numbers. With regards to the MMRCA, an order of 36 aircraft will likely be acquired. But it will be a while before such a contract is signed.
The last of the 36 Rafales are due by April 2023 and the ISE updates on them will be complete by Sept 2023. These dates will likely be pushed by a few months, as the first batch of Rafales are already delayed by two months due to COVID. Elections are due by May 2024. The NDA Govt will delay the new MMRCA order (using lack of funds as a reason which is a valid one because of COVID and its effect on the global economy) till the end of their current term and leave the decision to the next govt. Defence Minister Rajnath Singh has said that the IAF will have to make do with the 36 Rafales for the short term. No Govt will sign anything during election season anyway.
In this scenario, the two OEMs that stand to gain the most are 1) Dassault and 2) Lockheed Martin. The geo-political scenario - post 2024/2025 - may make it favourable for the US Govt to grant permission to LM to sell the F-35 to India. Right now, that environment does not exist. No one has a crystal ball, but who knows what might happen in the future. That would be a big win for LM and a huge capability boost for the IAF. I personally believe that the relationship between the two nation will continue to progress.
Dassault equally stands to gain as they know 36 more Rafales can easily slot into the IAF's ORBAT. The infrastructure already exists and by 2024/2025, there will be a sizeable roster of qualified Rafale pilots to raise two more squadrons. And Dassault has no reason to worry about the capability of the Rafale. The IAF has made their satisfaction very clear to Dassault - from the Air Chief down.
In either scenario - F-35 or Rafale - aircraft will come in flyaway condition. Factory, Job Creation, Production Line, Export is all done
. That mantle will now be taken over by the Tejas. There is no game changer in any of the other MMRCA contestants over the Rafale to make a case for 114 of them anyway. The F-35 is the only exception and that aircraft is not taking part in the (current and now defunct) MMRCA contest. Only time will tell who between Dassault and Lockheed Martin will get the next contract of 36 MRFA.