It looks to be a good week for the airplane makers at France’s Dassault Aviation.
New Delhi announced this week that it would buy 126 of Dassault’s Rafale fighter jets worth $10 billion instead of Eurofighter Typhoons. American, Russian and Swedish aircraft manufacturers, including Boeing and Lockheed Martin, were earlier rejected on technical grounds.
Brazil said it was “very likely” to buy the French jets as well. According to Reuters, President Dilma Rousseff and her top advisors believe that Dassault’s bid to sell at least 36 of its combat aircraft to their air force offers the best terms compared to Boeing’s F-18 and Saab’s Gripen fighter.
Rousseff previously had concerns about the Rafale because it had not found any international buyers. This raised doubts about whether Dassault would have the capacity to build the planes at a reasonable cost and maintain them over time. The deal with India reportedly assuaged their fears.
The Brazilians, who intend to establish themselves as a regional if not international power broker in the decades to come, say that Dassault offers the best combination of an advanced fighter plane and the sharing of proprietary technology that can be used to expand its domestic aircraft making industry. The contract with the French will have an initial value of $4 billion but could be worth more over time once maintenance and additional orders are included.
India, too, is a booming market for defense contractors. Last year, India’s militarty budget amounted to just over $36 billion or 1.8 percent of gross domestic product but the country expects to spend nearly $120 billion on modernizing its systems between 2012 and 2017. In part, the buildup is aimed to counter China’s expansion across the Indian Ocean region.
Close to 70 percent of India’s weapons are produced abroad, mainly by American, Israeli and Russian firms.
Brazil may not be the only country to follow India’s lead. The French newspaper La Tribune reported earlier this month that Dassault could soon seal the sale of sixty Rafale jets to the United Arab Emirates. Eurofighter is still in the running to sell fighter planes to Oman and the UAE as well.
The Brazilian and Indian sales could enhance France’s partnership with two of the world’s fastest rising powers and perhaps prove a boost to President Nicolas Sarkozy’s reelection campaign. He has cast himself as the champion of French industry at a time of lackluster growth at home. Blue collar voters are especially concerned about the decline of manufacturing in their country and drawn to the economic nationalism of the far-right Front national but it is Sarkozy’s socialist rival who is poised to win the presidential election in April unless the conservative manages to stage a comeback at the last minute.