How have the French outgunned Britain over a huge jet fighter deal with India? We investigate rumours of secret talks and nuclear trade-offs
“The Indians did very thorough testing, and worked out the cost not just of the purchase but also of operating the planes for 40 years.”
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Inside a £13bn dogfight
Nicolas Sarkozy claimed last week that the UK 'had no industry' (Goff Photos)
Like a fighter jet swooping out of the sun, it was an ambush. Last Tuesday officials vying to clinch a huge military deal with India were summoned at short notice to the defence ministry in Delhi.
There were senior representatives from EADS, the lead member of the consortium that builds the Eurofighter Typhoon, and which includes BAE Systems, Britain’s biggest defence company. Alongside were representatives of Dassault Aviation, the French firm that builds the Rafale jet fighter. At the same time, ambassadors of the competing nations were called into the grey offices of India’s external affairs ministry.
Nobody thought anything was amiss. Business leaders and envoys expected to be asked to clarify points of their complicated bids. Privately, the Eurofighter consortium was confident it would ultimately win because the Eurofighter had impressed the Indian air force on its technical merits. “They went into that meeting expecting to be given an update, with March as the date when preferred bidder status was going to be announced,” said a defence industry source. “They were all caught off guard.”
Ten minutes into the meeting, a bombshell dropped: the Indians said Dassault had been chosen as their preferred bidder for the £13 billion deal. The British were stunned.
Ministers had believed the programme would bring billions to the UK and safeguard up to 5,000 jobs. Some had hoped that the £1.2 billion Britain is giving in aid to India over five years would help secure the fighter jet order.
Instead, India had snubbed its donor and former colonial master by favouring Britain’s arch-rival the French. It was a bitter blow, coming just after President Nicolas Sarkozy had taunted Britain by accusing it of having “no industry”.
The French press crowed. “The biggest arms contract of all time in the subcontinent,” boasted Les Echos, a financial newspaper. “The top prize, the contract of the century,” trumpeted the usually staid Le Monde. Sarkozy, infuriated two months ago when Britain vetoed a proposed new European Union treaty, could grin smugly once again.
In the aftermath, rumours swirled about how the French had managed to spring such a surprise. There was much talk of “offsets” — diplomatic language for “You scratch my back and I’ll scratch yours”. Some said France had offered an unrealistically low price for the Rafale. And late last week both Indian and British sources suggested the French might be willing to trade nuclear technology in return for landing the riches of the fighter contract.
Were there secret deals? Or is France supplanting Britain in importance as a trading partner with India, the second-largest nation on Earth?
In 2009 the Rafale was regarded as so inferior that the Indian air force threatened to disqualify it for failing to comply with technical demands. The plane has been rejected by various other countries, including Holland and Morocco.
Within days the French defence minister had been dispatched to Delhi, and Sarkozy was on the phone to Dassault. Before long Dassault was reinserted into the race to supply India with more than 100 fighters; others in the running were America’s F-16 and F/A-18, Sweden’s Gripen, Russia’s MiG and the Eurofighter Typhoon.
By July 2010, when David Cameron chose India as his first prominent foreign tour, Britain had growing hopes that the Eurofighter could win the deal.
Accompanied by six cabinet ministers and 39 business leaders, including senior BAE executives, Cameron generated positive headlines across India.
After a speech to Indian IT workers in Bangalore, Cameron moved on to Hindustan Aeronautics, the pride of India’s manufacturing industry.
There he signed a deal for BAE to supply 57 Hawk jet trainers. Rolls-Royce would make the engines, and the planes would be assembled in Bangalore. It seemed like a good omen for the bigger hope of India buying 126 Typhoon multi-role combat aircraft.
A year later, however, a hint emerged of how shadowy the world of defence deals can be. At the 2011 Bangalore airshow, which attracted about 700 exhibitors from 45 countries, a minor scandal about alleged bribery arose.
An Indian official was caught accepting a bribe for giving Dassault planes a favourable spot in the exhibition; the local Dassault manager apparently reported that he had been asked for the bribe.
“The complaint is that he was asked for a bribe and he paid the money, which was photographed,” said an Indian defence ministry spokesman at the time. Dassault denied any wrongdoing and said its manager had merely been a witness in the case.
Two months later the Rafale was selected for India’s final shortlist of planes it might buy; the other was the Eurofighter, knocking the stunned Americans out of the race.
Though the full commercial offers of all the companies had by then been delivered in sealed envelopes, Sarkozy attempted to reopen the French bid to submit a better-priced offer. His requests were denied and on November 4 last year senior executives gathered at the Indian defence ministry where the bids were unsealed. According to industry sources, the Eurofighter consortium was surprised to see the French bid looked like a “booklet” next to their own reams of detailed specifications.
EADS was convinced it had a more attractive all-round bid, not only on long-term costs, but because of its offer to transfer certain technology to India. However, British diplomatic sources said there was some surprise when, despite the complicated nature of the bids, the Indians asked no follow-up questions. An MoD source pointed out that the Typhoon bid was led by Germany with a highly detailed approach that may have been offputting.
Were other factors at play? The role of “agents” in negotiating and influencing big defence deals has been an open secret in Delhi for several years, with several local families known to be key brokers within the corridors of power.
Although it is unclear whether any of these families have been involved in the fighter jet deal, industry insiders claim that Bernard Baiocco, a veteran French consultant, took part in background negotiations. Baiocco, a former employee of the Thales defence firm, allegedly met a senior and influential official in the administration.
Nicolas Sarkozy claimed last week that the UK 'had no industry' (Goff Photos)
Like a fighter jet swooping out of the sun, it was an ambush. Last Tuesday officials vying to clinch a huge military deal with India were summoned at short notice to the defence ministry in Delhi.
There were senior representatives from EADS, the lead member of the consortium that builds the Eurofighter Typhoon, and which includes BAE Systems, Britain’s biggest defence company. Alongside were representatives of Dassault Aviation, the French firm that builds the Rafale jet fighter. At the same time, ambassadors of the competing nations were called into the grey offices of India’s external affairs ministry.
Nobody thought anything was amiss. Business leaders and envoys expected to be asked to clarify points of their complicated bids. Privately, the Eurofighter consortium was confident it would ultimately win because the Eurofighter had impressed the Indian air force on its technical merits. “They went into that meeting expecting to be given an update, with March as the date when preferred bidder status was going to be announced,” said a defence industry source. “They were all caught off guard.”
Ten minutes into the meeting, a bombshell dropped: the Indians said Dassault had been chosen as their preferred bidder for the £13 billion deal. The British were stunned.
Ministers had believed the programme would bring billions to the UK and safeguard up to 5,000 jobs. Some had hoped that the £1.2 billion Britain is giving in aid to India over five years would help secure the fighter jet order.
Instead, India had snubbed its donor and former colonial master by favouring Britain’s arch-rival the French. It was a bitter blow, coming just after President Nicolas Sarkozy had taunted Britain by accusing it of having “no industry”.
The French press crowed. “The biggest arms contract of all time in the subcontinent,” boasted Les Echos, a financial newspaper. “The top prize, the contract of the century,” trumpeted the usually staid Le Monde. Sarkozy, infuriated two months ago when Britain vetoed a proposed new European Union treaty, could grin smugly once again.
In the aftermath, rumours swirled about how the French had managed to spring such a surprise. There was much talk of “offsets” — diplomatic language for “You scratch my back and I’ll scratch yours”. Some said France had offered an unrealistically low price for the Rafale. And late last week both Indian and British sources suggested the French might be willing to trade nuclear technology in return for landing the riches of the fighter contract.
Were there secret deals? Or is France supplanting Britain in importance as a trading partner with India, the second-largest nation on Earth?
In 2009 the Rafale was regarded as so inferior that the Indian air force threatened to disqualify it for failing to comply with technical demands. The plane has been rejected by various other countries, including Holland and Morocco.
Within days the French defence minister had been dispatched to Delhi, and Sarkozy was on the phone to Dassault. Before long Dassault was reinserted into the race to supply India with more than 100 fighters; others in the running were America’s F-16 and F/A-18, Sweden’s Gripen, Russia’s MiG and the Eurofighter Typhoon.
By July 2010, when David Cameron chose India as his first prominent foreign tour, Britain had growing hopes that the Eurofighter could win the deal.
Accompanied by six cabinet ministers and 39 business leaders, including senior BAE executives, Cameron generated positive headlines across India.
After a speech to Indian IT workers in Bangalore, Cameron moved on to Hindustan Aeronautics, the pride of India’s manufacturing industry.
There he signed a deal for BAE to supply 57 Hawk jet trainers. Rolls-Royce would make the engines, and the planes would be assembled in Bangalore. It seemed like a good omen for the bigger hope of India buying 126 Typhoon multi-role combat aircraft.
A year later, however, a hint emerged of how shadowy the world of defence deals can be. At the 2011 Bangalore airshow, which attracted about 700 exhibitors from 45 countries, a minor scandal about alleged bribery arose.
An Indian official was caught accepting a bribe for giving Dassault planes a favourable spot in the exhibition; the local Dassault manager apparently reported that he had been asked for the bribe.
“The complaint is that he was asked for a bribe and he paid the money, which was photographed,” said an Indian defence ministry spokesman at the time. Dassault denied any wrongdoing and said its manager had merely been a witness in the case.
Two months later the Rafale was selected for India’s final shortlist of planes it might buy; the other was the Eurofighter, knocking the stunned Americans out of the race.
Though the full commercial offers of all the companies had by then been delivered in sealed envelopes, Sarkozy attempted to reopen the French bid to submit a better-priced offer. His requests were denied and on November 4 last year senior executives gathered at the Indian defence ministry where the bids were unsealed. According to industry sources, the Eurofighter consortium was surprised to see the French bid looked like a “booklet” next to their own reams of detailed specifications.
EADS was convinced it had a more attractive all-round bid, not only on long-term costs, but because of its offer to transfer certain technology to India. However, British diplomatic sources said there was some surprise when, despite the complicated nature of the bids, the Indians asked no follow-up questions. An MoD source pointed out that the Typhoon bid was led by Germany with a highly detailed approach that may have been offputting.
Were other factors at play? The role of “agents” in negotiating and influencing big defence deals has been an open secret in Delhi for several years, with several local families known to be key brokers within the corridors of power.
Although it is unclear whether any of these families have been involved in the fighter jet deal, industry insiders claim that Bernard Baiocco, a veteran French consultant, took part in background negotiations. Baiocco, a former employee of the Thales defence firm, allegedly met a senior and influential official in the administration.
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