Home >Politics >Policy >Rafale fighter jet deal deferred on budgetary constraints: Antony

New Delhi: India will not sign a $20 billion deal to acquire fighter jets for the Indian Air Force till the next fiscal year as the military has run out of money for the fiscal year, defence minister A.K. Antony said on Thursday, indicating it would be left to the next government to finalize the purchase.

“It has to wait for the next financial year starting 1st April," Antony said.

India does not have the budget to buy the jets, Antony said. “Ninety-two per cent of our capital budget (armed forces) has already been used, with only 8% left." he said.

India decided in January 2012 to buy 126 Rafale fighter jets from France’s Dassault Aviation after an extensive selection process, but follow-up discussions have been delayed over various issues. The deal is yet to be signed.

The decision to opt for the Rafale over the multi-nation Eurofighter Typhoon created a political storm in Britain, which has continued to lobby India to reverse its decision.

In October, Reuters reported the deal was to be finalized by March.

Another reason for the delay in the award of the contract, Antony said, relates to life-cycle costs that refer to costs associated with the aircraft, including maintenance and parts cost, for the duration it is operational in the Indian Air Force.

“MMRCA (medium multi-role combat aircraft) will materialize; only that (it will be) not (in) this financial year but next financial year," Antony said when asked if the government would buy Russian Sukhoi jets if the Rafale deal now falls through. “The negotiations on life-cycle costs are continuing. I hope we are able to close it in next financial year."

With the general election likely to be held in April-May, the election code of conduct is expected to kick in by early March, which means the deal is unlikely to be signed by the present government. No major policy or contracts can be announced 45 days before an election.

Dassault Aviation that makes Rafale has struggled to find any overseas buyers for the Rafale and lost out in December to Sweden’s Gripen in a deal with Brazil worth more than $5 billion that had been under negotiation for a decade.

India is the world’s largest buyer of arms.

A strategic analyst said new fighter jets are overdue for the Indian Air Force.

“The government does not seem to have any political problem regarding deals like the fighter jet deal. There is, however, a genuine financial problem. Both last year and this year, the government had to cut down on the non-salary defence expenditure," said retired Brigadier Rumel Dahiya, deputy director general, Institute of Defence Studies and Analyses (IDSA).

“The growth programme has certainly been scaled down and this will no doubt hurt the armed forces. But I don’t think the fighter jet deal is a case for playing political football and whichever government comes to power next, will, I think, clear it in double quick time."

Separately, Antony said there will be setbacks in defence procurements but “whenever malpractice is found we have to cancel and, when charges proved, blacklist" the firm.

Last year, India cancelled a 3,600 crore Italian-AgustaWestland deal for VVIP choppers and the Finmeccanica SpA group, of which Augusta Westland is part, was absent at this year’s military exhibition DefExpo.

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