UK steps up efforts to win Indian jet deal

The UK has stepped up its diplomatic effort to win a $20bn contract to supply Typhoon fighter jets to the Indian government after it saw a French company win “preferred bidder” status. But Indian experts suggest that effort is in vain.

David Cameron told MPs the government would make a major effort to win back the tender from Dassault’s Rafale, which won preferred bidder status last week. He said: “We need to engage as hard as we can to make sure we get the best deal for all those British workers who make Eurofighters,” adding Eurofighter “was not out of the contest yet”.

But India does not agree and is due to begin negotiations with Dassault in coming days to try to reach a final agreement expected to be reached within the next eight months.

India’s leading defence experts say India is highly unlikely to reopen its competition for 126 new jet fighters after choosing France’s Dassault Aviation as the preferred bidder to enter a final negotiation for a contract worth up to $20bn.

At a time of heightened concern across the Indian government about corruption scandals, the Congress party-led administration will try to avoid at all costs any unexpected reversal of the choice of Dassault’s Rafale as its new multi-role combat aircraft, they say.

Senior Indian military officials view the competition as one of the cleanest in their country’s defence procurement history and claim the decision was taken with the minimum of political interference. They are anxious that the choice stands up to scrutiny at a time when previous government decisions in the telecoms sector are being overturned by the country’s courts.

Nevertheless, this week Gerald Howarth, the UK’s minister for international security strategy, traveled to Delhi seeking answers as to why the bid by a four-nation consortium of the UK, German, Spain and Italy had been snubbed when it was considered the hot favourite.

The issue was added to a pre-arranged trip during which Mr Howarth told his Indian counterparts he thought the favoured bid, from France’s Dassault, would prove more expensive over the long-term. One government official said the Indians would realise the French bid was “like a mobile phone contract, with a lot of extra bolt-ons”.

Other senior UK ministers are likewise looking for explanations about the loss of a deal that had the potential to seal a wide-ranging industrial and defence partnership between India and its former colonial ruler.

Meanwhile, Germany’s Cassidian has agreed with its UK Eurofighter partner BAE Systems to drop the price of Typhoon if need be to win back the Indians, defence executives said.

Senior Eurofighter executives say talks with Dassault may break down in coming months. They doubt whether Dassault can deliver the aircraft at the price offered, to schedule and make a profit on the sale. They say that if Dassault’s negotiations stumble, as they have in Brazil and the United Arab Emirates, Eurofighter will be on hand to offer a competitive alternative.

They are taking encouragement from an earlier decision to turn from Rolls Royce, the UK’s engineering company, to General Electric, the US engineering group, to supply an engine for the Indian Air Force’s indigenously designed light combat aircraft.

The French government has resisted any public celebration. It turned to promoting nuclear energy partnership in Delhi this week with the visit of Bernard Bigot, the head of France’s Atomic Energy Commission.

Additional reporting by Girija Shivakumar