Updated: February 1, 2012 02:07 IST

Jubilation in France as Dassault wins deal

Vaiju Naravane
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French President Nicolas Sarkozy. File photo
French President Nicolas Sarkozy. File photo

Nicolas Sarkozy is likely to make political capital out of it and seek to boost re-election bid

India's decision to buy 126 French-made Rafale fighter jets for its air force in a colossal 7.9 billion Euro deal, has understandably made headline news in France with a discreet popping of champagne corks, not just at Dassault Aviation, the makers of the plane, but within President Sarkozy's entourage and his Conservative UMP Party.

This French victory over the rival Eurofighter Typhoon (made by EADS and financed by a four-nation consortium that includes Britain, Germany, Spain and Italy) comes at a crucial time for the French President who is facing a difficult re-election bid in May 2012. With less than 15 weeks of campaigning left and extremely poor ratings, Mr. Sarkozy, who in the past has described himself as his country's “top salesman” is likely to milk the deal for all it is worth.

Serge Dassault, the Chairman and CEO of Dassault Aviation is a right-wing Senator and member of the ruling conservative UMP Party. He is also one of Mr. Sarkozy's most ardent supporters and uses his right-wing daily, Le Figaro, to further the President's cause. Both men are probably enjoying a rare moment of quiet victory before the fraught campaign weeks that lie ahead.

France had almost given up hope of ever selling its hugely expensive technological marvel. Rafale in French means gale, gust or squall and an acerbic scribe once remarked that the cash-guzzling Rafale programme was more of a tornado than a gale, sucking up a massive chunk of the defence ministry's budget. Had the deal not gone through, Dassault Aviation, which has been experiencing significant financial difficulties, would have been obliged to stop the Rafale programme altogether.

In its 26-year-old history, France has been incapable of selling a single plane outside its own frontiers. Defence Minister Gerard Longuet said last December after the nth prospective buyer opted out of bidding for the plane that if no foreign buyer could be found to underwrite the programme, he would have no choice but to scrap Rafale.

French Ambassador to New Delhi Francois Richier undertook several trips to Paris these past weeks in an attempt to throw in last minute sweeteners that would swing the deal for France. Ultimately, it was the price factor that carried the day, reliable sources said.

The Rafale first took to the skies in 1986 and at one point or another since, South Korea, The Netherlands, Singapore, Morocco, Libya, Brazil, Saudi Arabia, the UAE, Switzerland, Greece and even Britain's Royal Navy were tipped to purchase the fighter. All declined after showing initial interest. Too expensive, too difficult to handle, too sophisticated, they said.

But the news from New Delhi that final negotiations had been opened for the purchase by India of 126 Rafale jets made Dassault Aviation's share price jump a record 20 per cent on European markets, bringing the share to its highest level in 22 years. Officially, the company remained prudent, indicating that the announcement in Delhi was “just another step” towards reaching a commercial agreement. “No contract has been signed as yet. We have just moved one step closer to finalisation,” a source at Dassault told Reuters agency.

The Hindu's sources however indicated that the contract was a lifesaver for Dassault, which “could have experienced serious problems with job cutbacks and factory closures had this contract not come through.” Insiders say there was “unmitigated relief and joy” at Dassault headquarters.

There was some bitterness at EADS, the makers of the rival Eurofighter. A source at EADS told The Hindu that India's decision was “dictated as much by political concerns as it was by military ones.” The source said that the Eurofighter was a more advanced, younger and more modern aircraft. The fact that France has a permanent UN Security Council seat tipped the balance in favour of Rafale, the source indicated.

So fierce was the competition between the two companies that EADS Chief Louis Gallois who is French, expressly asked The Hindu to refrain from publishing his interview while Mr. Sarkozy was still on Indian soil during the latter's official visit in December 2010. “We are both pushing competing products. It could complicate matters,” Mr. Gallois, who was part of President Sarkozy's delegation explained.

Pat for transparency

Mr. Sarkozy in a statement obliquely refuted EADS suggestions that he had used political clout to swing the contract by praising the “transparency” of the selection process adopted by the Defence Ministry.

But his ministers themselves preferred to remain discreet. Pierre Lellouche, the junior minister for foreign trade said: “We have won the contract but it still remains to be finalised. We have entered a phase of exclusive negotiations.” Officials at the Finance Ministry said: “If any announcement is to be made at all, it will come from the Elysee presidential palace.”

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In 1672 French established at Pondichery in India.Rivalry between French and British set for control of Indian trade.In1760 East India company defeated the French at the battle of Wandiwash ending almost a century of conflict over supremacy in India.But after two and half centuries France has inflicted a major blow to the British by getting this prestigious deal from India.This blow had made UK to talk on so many things about the aid to India which is considered as Pea nuts by Pranab.We honor the French for Pondichery which protected our Tamil poet Bharatiyar but also for the Aurabindo Ashram established there. But British has already got enough from India during three and half centuries rule here.We still adore the cricket they have left behind.

from:  Seshachalam gopalakrishnan
Posted on: Feb 7, 2012 at 11:48 IST

In UK , there is now talk that India will lose her one billion pound aid from UK and the funds diverted to the BAe workers. Furthermore, companies which use Indian call centres and outsourcing might face customers who move their customs to those companies which do not give business to Indian companies. Indians stand to lose a lot of UK outsourcing jobs.

from:  Yvonne S
Posted on: Feb 2, 2012 at 03:05 IST

On a serious note, it is a necessary evil. Though there are thousands
who are malnourished and without basic amenities, we have to improve
our defense system. One point of concern is the so many negative
factors in opposition of the Rafale. France never being able to sell
in the past 26 years, too expensive, so many countries rejecting, too
sophisticated and the company almost about to get bankrupt?! Only
reason being low cost in "complex life cycle costs"?!
I am in no position to comment on the fairness of the deal due to my
inexperience but I sincerely pray that I do not wake up one fine
morning to read about another scandal followed by mud slinging and
court cases.

from:  KV
Posted on: Feb 2, 2012 at 00:12 IST

I donot think this deal will boost the chances of Sarkozy winning the Presidential election. I appreciate India's willingness to modernize it's Airforce. But, is it worth spending so much on a fighter jet which nobody was interested in purchasing? The only out come of this deal is that the Rafale programme will survive "Grace à India".

from:  Asokan Suppiah
Posted on: Feb 1, 2012 at 23:39 IST

The world only respects power, raw, armed to the teeth power. We have most often
been called a soft power who uses the foreign ministry to leverage that softness.
When people talk about China, they are referring to the China with a lot of military,
the political stability and the trading behemoth. We need to develop that military
infrastructure and indigenize it as much as possible - every money spend should
not go into filling in more foot soldiers - but to acquire the bleeding edge of

It's disturbing to hear people talk about poverty and hunger and waste and all that.
In 1820, we had 20% of world trade, China had 30% of world trade and these two
combined forced had 50% of world trade. We had a lot of money, a lot less poverty
than the west. But what happened after that is quiet a startling disgrace. We did
not have the military power to back our trade capabilities. We got looted to the
extend that we were accounting for less than 2% of world trade in 2000s.

from:  Jacob Cherackal
Posted on: Feb 1, 2012 at 22:38 IST

Hope political considerations has not played in this contract, with a buffer to get the permanent seat in the UN security council. If it was politics rather than specifications which has won France this contract then this can be another biggest arms alleged scandal since the Bofors. If British PM is still confident that India will change its stance it means India has not gone in for specifications and geographical suitability. Mr Antony has to keep his clean image than waiting to be proved like Mr. Chidambaram.

from:  Arun Bennis Loftus
Posted on: Feb 1, 2012 at 20:56 IST

France is the most important strategic partner of India in Western
Europe region.It didn't impose sanction on US in 1998, its Mirage 2000IN
played a pivotal role in Kargil Conflict outsmarting Pakistan's F-16 at
every instance still being the second most important war birds of
India.I have full faith and confidence in French military tech and

Posted on: Feb 1, 2012 at 18:28 IST

It is really a huge step for India in it's efforts to modernize its Air force which is really very very weak. The French always has been very cooperative with India and they deserve this contract. India should buy more of these planes rather than buy from someone else toy to please other countries who are not very cooperative. I strongly suggest that India should buy another 250 of these places to strengthen its forces. Of course 300 places are not enough. I am looking at 1000 number of planes so that India's citizen will feel safe and the Air force's morale will be higher. Taking a page from history, I have to point out,in the Israel-Egyptian war in 1967, 200 Egyptian planes which was the pride of Egypt was destroyed in 30 minutes by Israel and Egypt lost the war . I am sure we do not wish to be in that situation.

from:  S Krishnan
Posted on: Feb 1, 2012 at 05:36 IST

As lay common man in India and craving for a square meal a day,without any employment or income,how he knows about his GOvt going for a bigges committment ever for acquiring hundreds of warplane.Country like india on the developomnet of economy inspite of various shortcoming, poverty amongst plenty,corruptions amongst big vips and power infighting amongst the politicial masters,India is getting stronger day by day and hopefully, by change of guards may attain full dependance on its economy early. WHat do the Bjp, being the main oppsotion say about this huge purchase of fighters?

Posted on: Feb 1, 2012 at 04:58 IST
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