Rafale for India - illegally subsidised, asks a French paper?
There have been whispers that EU competition authorities have been looking into MMRCA.
And now this:
"Rafale to India at bargain prices
France has proposed to India to sell its Rafale at bargain prices, writes the French magazine Le Canard Enchainé.
Always very well informed about the background of French politics scenario, the newspaper said India has recently chosen to launch 'exclusive negotiations' for the purchase of 126 Rafale made by the French group Dassault Aviation but that the aircraft had been chosen because of the extraordinary 'discount' offered by Paris.
For France - The Canard said, citing data from the French Court of Auditors - Rafale cost "some 150 million Euro." While to the Indians a proposal was made at "80 to 87 million Euro". "A huge difference in price," commented Le Canard, questioning the reasons for this discount:
"Either Rafale is sold at an inflated price for the French, or this is dumping, special discount under cost" states the magazine. Rafale has been offered at a much higher price to the United Arab which is interested in 60 aircraft. Now UAE could ask for an explanation as to why Rafale has been offered at a much higher price than to India?
A similar "game" has been played by the French in Brazil, where the aircraft has been offered at around 100 million each.
The real question raised by the article is if Rafale costs around 142 million Euro each for France, how can Dassault offer the aircraft to India for only 80-87 millions Euro? Who pays the difference in cost? The French taxpayer? Or maybe other Arab countries, interested in Rafale, will be financing the discount offered by the French to the Indians?"
Of course Rafale doesn't cost €142 m (unless you count R&D and other 'whole programme' costs) so the subsidy isn't as large as this report indicates. But figures from France’s Assemblee Nationale and the ‘Cour des Comptes’ (the French NAO) that indicate a programme unit cost of €142.3 m ($188.68 m) for Rafale, also give a unit production cost of €101.1 m ($134 m). You'd expect the export price to be at around this level, perhaps with a small profit margin and perhaps an export levy. Lower than this and it does look as though there has been a subsidy.
Still, what cost getting your first export order?