Warranty Compromise Agreed on India Rafale Contract
(Source: Defense-Aerospace.com; published Mar 11, 2015)

(By Giovanni de Briganti)
PARIS --- A compromise solution splitting contractual warranties between France’s Dassault Aviation and India’s Hindustan Aeronautics Ltd. (HAL) has removed the biggest obstacle to closing the long-delayed sale of 126 Rafale fighters to India.

Dassault chief executive Eric Trappier confirmed here today that the compromise solution makes each company contractually responsible for its own work on the contract. This is of crucial long-term importance as HAL is due to gradually assume a bigger share of the 108 Rafales it is due to assemble, and ultimately manufacture, in India.

“Now, there will be a shared warranty as each partner will be responsible for its own work, Trappier told reporters here, “and HAL will provide warranties for its own work.” The Indian government has been insisting that Dassault take responsibility for the aircraft assembled by HAL, over which it had no control, and both sides have wrangling over this point for the best part of two years.

This is the same warranty arrangement that is currently in force for the two companies’ work on the ongoing upgrade of India’s fleet of Mirage 2000H fighters, and it is not clear why it was not adopted from the start. A senior Dassault executive said “taking responsibility is the only way to grow up and to gain experience,” and it is what Indian manufacturers must do to implement the governments “Make In India” policy.

For the Mirage upgrade, Dassault is supplying the first two complete upgraded aircraft – they are due to be delivered in the coming weeks – while the rest will be upgraded by HAL in Bangalore. HAL will provide the warranty for the latter, with Dassault providing assistance as necessary.

Trappier was careful to note that resolution of the warranty issue does not mean an immediate signature of the Rafale contract, as this is always a long process in India as many administrative levels are involved. (The long-overdue report of the Contract Negotiation Committee, which is necessary for the Rafale contract to be approved, has still not been released—Ed.)

Dassault has replied to a request for information from the Indian Navy on the naval Rafale M single-seat carrier-capable variant of its fighter, Trappier said, but this aspect has been overshadowed by the main contract.

He also declined to provide any clarity among the conflicting cost figures published in India on the Rafale contract, but he did say that, in euros, its cost has not increased since 2012. And the euro’s depreciation compared to the US dollar makes Rafale more competitive than its foreign competitors, he added.

According to current plans, Dassault is to build and deliver the first 18 Rafales from its own production line at Bordeaux-Mérignac, but HAL will assemble all aircraft beginning with the 19th aircraft, and will manufacture a gradually bigger share of the aircraft so that, by the time the 126th is delivered, it has become practically autonomous.

Trappier also dismissed reports in the Indian press that the Rafale deal will be replaced by a new buy of Russian fighters. “I see that Rafale is a fighter that scares the Russians, but we are not afraid of their fighters,” he said, adding that Russian competitors had been eliminated from the Medium Multi-Role Combat Aircraft (MMRCA) competition that Rafale ultimately won.

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