Ahead of French president Emmanuel Macron’s imminent three-day visit to India beginning February 18, the Defence Acquisition Council (DAC), chaired by defence minister Rajnath Singh, has fast-tracked the Acceptance of Necessity (AoN) for acquiring 114 Rafale fighter aircraft from France for around Rs 3.25 lakh crore. Around 12-18 aircraft are likely to be bought in fly-away condition, with the rest to be manufactured in India via transfer of technology. Their indigenous content is projected to rise to about 60% by the time deliveries conclude around the mid-2030’s.For the Indian Air Force (IAF), grappling with steadily shrinking fighter squadrons, down from a sanctioned combat strength of 42 to merely 29-30, this should be long overdue welcome news. Yet, ironically, it also evokes a strong sense of uncomfortable déjà vu.The last comparable AoN, accorded on June 29, 2007, involved the acquisition of 126 Medium Multi-Role Combat Aircraft (MMRCA) for an estimated Rs 42,000 crore. Of these, 18 were to be delivered off the shelf and 108 built locally by Hindustan Aeronautics Limited (HAL) under a transfer-of-technology arrangement. Instead of resolving IAF’s problem, this approval turned out to be the beginning of a long, convoluted procurement saga marked by shifting requirements, protracted negotiations, cost escalations, and eventual scrapping of the tender – lessons that continue to cast a long shadow over the proposed procurement.Following the 2007 AoN, a Request for Proposal (RfP) was issued in August that year, drawing bids from six global manufacturers – Dassault’s Rafale, Eurofighter’s Typhoon, Lockheed Martin’s F-16IN ‘Super Viper’, Boeing’s F/A-18IN ‘Super Hornet’, Saab’s Gripen, and RAC MiG’s MiG-35. What followed was one of the most elaborate evaluations the IAF has ever conducted, assessing rival contenders against over 600 operational and technical parameters.After trials across multiple environments and commercial evaluations based on life-cycle costing, Dassault was declared L1 or lowest bidder in January 2012. However, just when price negotiations appeared to be nearing closure, governments changed and the new dispensation at the centre cancelled the procurement process in July 2015.More than a year later in September 2016 the government opted for a faster inter-governmental agreement (IGA) to acquire 36 Rafales in fly-away condition for Rs 59,000 crore, with a 50% offset obligation, requiring the vendor to reinvest half the contract value back into India through defence manufacturing, materiel sourcing, technology transfers, and related programmes.At the time, the French fighter purchase was explicitly described as a ‘stop-gap’ or ‘intermediate’ measure to arrest the steady erosion of IAF squadron strength. However, to address the larger requirement, a fresh Request for Information (RfI) for 114 multi-role fighter aircraft (MRFA) fighters was issued only three years later in April 2019. That RfI is the one which forms the conceptual basis of the proposal that has received AoN before President Macron’s arrival.But this AoN stage should not be mistaken for closure, as it is merely a formal in-principle approval by the Ministry of Defence (MoD) to begin the tendering process and all that that follows. From thence onward lie the most delay-prone phases in any military equipment purchase that include drafting and dispatching the RfP, technical and commercial evaluations, price and contract negotiations, and approval for awarding the contract which, in the instant case, will be accorded by the Cabinet Committee on Security.It is not known whether acquisition of 114 MRFA will follow the usual procedural route or take a short cut, but in retrospect, a larger Rafale order could likely have been concluded around 2014-16 when commercial and contractual negotiations with Dassault had already reached a near-final stage. That would almost certainly have been more cost-effective and slowed the downward slide in the IAF’s fighter squadron numbers.Be that as it may, arguably the most complex question confronting the IAF now is not which fighter it will select – having decided already on the Rafale – but how the bulk of the fleet – some 108-112 of them will be manufactured in India.In May 2017, the MoD had adopted a Strategic Partnership Model (SPM) to build long-term domestic private-sector manufacturing capacity across fighters, helicopters, submarines, and armoured vehicles. The model envisaged selection of Indian companies with proved advanced engineering capability, manufacturing depth and financial solvency as strategic partners, who would collaborate with overseas original equipment manufacturers (OEMs), selected by MoD via a parallel process, for technology transfer, local production, lifecycle support and upgrades.In practice, however, this template has moved glacially, weighed down by complex eligibility filters, procedural layering and bureaucratic caution over choosing from among competing private-sector contenders. The SP model has produced more process than platforms, as not a single major SPM project has fully matured in nearly a decade, one of the core difficulties being the risk inherent in selection of the strategic partners.The SPM was a more complex version of the earlier ‘Buy and Make’ category under which MoD entered into contracts with foreign OEMs for off-the-shelf purchase of a limited number of platforms, followed by local production via nominated Indian Production Agency (IPA) to meet the bulk of the requirement. These procurement programmes went through more smoothly as long as the IPA was a nominated DPSU like HAL. But things got complicated when it came to nominating an IPA from the private sector.Even the ‘Make I’ category – an offshoot of the original ‘Make’ category – intended to support prototype development by Indian industry with limited government funding, has struggled due to difficulties in shortlisting Development Agencies (DAs) and structuring risk sharing. The task of shortlisting an Indian company as an SP, IPA or DA is fraught with the risk of being blamed for acting under bias that has repeatedly stymied pragmatic decisions.But the good news is that a practical workaround already exists. A contract signed in 2021 by the MoD with Airbus Defence and Space for 56 C-295 transport aircraft – 16 to be acquired off the shelf and 40 to be manufactured in India – to replace the Hawker-Siddeley HS-748 ‘Avro’ aircraft broke this logjam by allowing the European OEM to select its own Indian partner – Tata Advanced Systems Limited – instead of requiring it to tie up with an MoD-nominated IPA. The tender also deliberately excluded HAL, despite pressure from vested interests, and ended up creating India’s first parallel military aircraft manufacturing programme in the private sector.Though the contract took time to finalise, the resulting structure proved workable in execution. This ‘Avro replacement model’ has entered procurement folklore but curiously it does not seem to have ever been replicated. This reluctance reflects the system’s enduring discomfort with delegating partner selection to OEMs and stepping away from bureaucratic control, even when experience shows the approach can deliver more efficient and faster results.In effect, a rare procurement success has become an exception rather than a template. Applying this template to the 114-fighter programme could significantly compress timelines. It would require the MoD to allow Dassault to choose its Indian production partner, subject to oversight safeguards, and save itself from a politically and administratively fraught internal selection exercise.A structured tripartite contract, involving the government, Dassault, and the Indian production partner of Dassault’s choice, could enforce technology transfer, indigenisation targets, lifecycle support, and upgrade obligations. If speed, capacity creation, and fighter squadron augmentation are the real objectives, replicating that simpler ‘Avro replacement model’ may prove more effective than persisting with a feeble framework that is yet to deliver at scale.Amit Cowshish is a former financial advisor (acquisitions), Ministry of Defence.This piece was first published on The India Cable – a premium newsletter from The Wire – and has been updated and republished here. To subscribe to The India Cable, click here.