India is close to signing on to a $35 billion deal to buy 154 Russian-made PAK FA T-50 fighters - some of which would be assembled in India

A collaboration contract for joint work and delivery of 154 Perspective Multirole Fighter (PMF), the derivative Indian version of the PAK FA T-50 fifth generation fighter jet, is expected to finally be signed during the Indo-Russian summit this December, The Financial Express reports.

The agreement, which already was supposed to have been signed this July, includes a fixed order of 154 aircraft, a definite work share commitment, and a detailed order of the number of single- versus double-seat PMF (aka Fifth Generation Fighter Aircraft) fighter planes. According to the draft agreement, the aircraft will be built in India, but all of the components will be manufactured in Russia.

Additionally, the contract will likely include specifications regarding the 40 changes that the Indian Air Force (IAF) wants in comparison to the current T-50 prototype such as the aircraft’s AL-41F1 engine and its stealth and weapon-carrying capability.

As I reported previously (See: “What’s the Status of the Indian-Russian Fifth Generation Fighter Jet?”), in early 2007 India and Russia agreed to jointly develop a fifth generation fighter jet. Unfortunately, the program has been plagued by delays, cost overruns, and unsteady technology; which, among other things, has affected the IAF’s plan to increase the number of combat squadrons from currently 32 (some sources say 35) to 42 by 2027 (See: “India’s Air Force Will Field 42 Combat Squadrons by 2027”).

As a result, according to a senior official in the Indian Ministry of Defense quoted by The Financial Express, the Indian government might need to reevaluate its negotiation position vis-à-vis Russia when it comes to details of the contract:

Given the current situation, where the Indian Air Force (IAF) is in deep trouble due to its fast depleting force structure, the Indian government will need to take well thought out decision with long-term and strategic foresight. There is no doubt that the PAK-FA (Sukhoi Design Proposal) will be emerge as a major FGFA in the world. Hence, it would be better for India to take a reality check on the FGFA and recalibrate its position.

Speaking to The Financial Express, retired Air Marshall M. Matheswaran provided some additional background info on the FGFA program:

The origins of FGFA proposals go back to 2002, when it was suggested by the Russians for an inter-governmental program. Given the urgency of its requirement for the badly-depleted Russian Air Force and the need for financial investment to cover the huge cost of the program, Russia hoped to address it through India as its partner. Besides, a huge order from the IAF would retain continuity in India-Russia military aircraft production relationship and help the Russian aircraft industry. In the meantime, many things have happened. The IAF has downsized its requirement to just 64 aircraft as off-the shelf buy. Discussions on costs and role in non-existent design and development have resulted in a messy situation. The defense minister will have a tough call to make.

The Russian Air Force is slated to receive its first batch of PAK FA T-50 fifth generation fighter jets by late 2016 or early 2017. However, the current head of the Indian Air Force, Air Chief Marshal Arup Raha, is not counting on the successful completion of the Indo-Russian project:

If the FGFA comes through it is fine, otherwise the Indian FGFA — that is the AMCA, the advanced medium combat aircraft — we still have over 15 years to work on it before the MiG-29 upgraded aircraft retire, before the Mirage 2000 upgraded ones retire, as well as Jaguar upgraded ones retire in another 15 years.

Both countries have already invested around $230 million into the program. If the $35 billion deal is signed, it would be one of India’s most expensive defense procurement programs ever.