India’s Cabinet Committee on Security (CCS) on July 13 finally approved the upgrade of 51 Indian Air Force Mirage (IAF) 2000 fighters at a cost of $ 41 m apiece. This will be India’s most expensive defence upgrade programme, which will improve its Mirage 2000 H variants to the ’Dash-5’ standard. These fighters were acquired in the mid-1980s at a cost of $ 31 m apiece. The upgrade is expected to extend the relevance of the platform for another 20 years.

Under the plan proposed by Thales in July 2008, the first two aircraft will be upgraded in France and delivered within 40 months of the signing of the contract. The French company will also assist HAL in upgrading another two aircraft in India. And thereafter, HAL would churn out one upgraded Mirage-2000 every month.

The $ 2.1 b programme is aimed at improving the fighter’s longer range detection capability, tactical situation awareness, longer range weapon firing capability against multiple targets in the air and on the ground simultaneously and extend its operating envelope.

The entire frame would be stripped down to be re-wired and re-equipped with new avionics, mission computers, glass cockpits, helmet-mounted displays, electronic warfare suites and weapons systems. But reports suggest that no decision has been taken so far on the weapons suite for the IAF’s souped up Mirage. The new weapons suite would include MBDA MICA and ASRAAM missiles and other NATO standard air-to-surface guided weapons. This would be considered by the CCS separately.

Price has been a sticking factor, leading to delay in the decision. The programme was approved as far back as 2006. “A much higher price was quoted earlier, leading to protracted negotiations,” reveals former IAF chief Fali Major. The initial asking price was $ 2.9 b. There were suggestions that the size of the MMRCA order be extended rather than pay close to $ 60 m apiece that was initially demanded for the upgrade.

An immediate comparison is drawn with the upgrade cost for the IAF’s 62 MiG-29 fighters, which was fixed at $ 1 b in 2009. The MiG-29 was inducted into the IAF around the same time as the Mirage-2000. The upgrade is intended to make the MiG-29 multi-role, extend its life by 15 years, improve its capability to fire advanced weapons. The package includes the Phaztron Zhuk-ME radar at the heart of a new avionics suite, extra fuel tanks, in-flight refuelling capability and a reinforced centre spine. In other words, this programme, although running three years late, is comparable to that of the Mirage’s.

Diplomatic pressure to conclude the Mirage upgrade deal drove Thales to lower its price bid by deciding to outsource a significant amount of work to India. Indian avionics companies like Samtel, which has a JV with Thales, are expected to be beneficiaries. Certain components will be produced locally in India. This will also take care of the offset obligations.

But a late bid by Israeli IAI queered the French pitch. In December 2009, IAI offered a deal 40 per cent cheaper than the French. The Israelis proposed rewiring the Mirages to carry Rafael’s Derby BVR and Python short range missiles, as also Israeli air-to-surface guided weapons. A mission siumlator too was offered. “But you can’t do upgrades without the OEM,” shrugs Air Chief Marshal Fali Major. India didn’t want to offend the OEM, but the Israeli pitch may have helped it extract a better deal from Thales.

The upgrade price is still a bomb, but Air Chief Marshal Major believes it’s a good compromise. “You have to see it as an interim measure. The Mirage upgrade will give the IAF’s limited squadron strength much better capability till the MMRCA and LCA induction stabilises,” he says. The contract with Thales is expected to be signed soon.