France to sell 42 Rafale jets to Indonesia at $8.1 billion

Indonesia has placed an order for 42 Rafale fighter jets for $8.1 billion, according to France’s defence ministry, as part of a series of deals that also include submarine development and ammunition, making Jakarta the region’s largest French arms client.

The agreement comes as Paris, which sees itself as a global maritime power, tries to strengthen geopolitical connections in the Indo-Pacific following the formation of AUKUS, a new strategic alliance between the US, the UK, and Australia last year.

“We intend to buy 42 Rafale,” Indonesian Defense Minister Prabowo Subianto stated during a meeting with his French counterpart Florence Parly.

“The strengthening of our defence cooperation will enhance our strategic relationship,” France’s Minister of the Armed Forces, Gérard Parly, stated.

According to Parly, Indonesia will become the second country in the Indo-Pacific area, after India, to rely on the Dassault Aviation jet.

The plane agreement, which would enhance production at Dassault Aviation, Safran (SAF.PA), and Thales, is valued $8.1 billion, according to a French defence ministry official.

The first phase of the contract, consisting of six Rafale jets, will be completed in the coming months, with the remaining 36 jets arriving later this year or next year, he added.

Dassault Aviation said the agreement was the beginning of a long-term cooperation that would allow it to expand its presence in Indonesia quickly. The news of the arrangement boosted the company’s stock by almost 4%.

According to a defence ministry official, the agreement signed on Thursday will make Indonesia, which is presently ranked second behind Singapore, France’s largest military procurement client in Southeast Asia.

In addition to the fighter jets, Indonesia has signed a memorandum of understanding to collaborate on submarine research, which is expected to result in an order for two Scorpene vessels from Naval Group, according to the French defence ministry.

Following Australia’s abandonment of a multibillion-dollar submarine agreement with Paris last year, which accused its friends of backstabbing, the subject is sensitive for France.

When asked by media whether the AUKUS alliance and the failed Australian submarine purchase had influenced negotiations with Indonesia, a representative for the French defence ministry stated, “I don’t think so, neither in one way nor the other.”

“We have an Indo-Pacific policy,” he continued, “and we are determined to maintain our defence industry and hence to export.”

Indonesia, too, is concerned about AUKUS, fearing that the employment of nuclear-powered submarines could exacerbate geopolitical tensions in Southeast Asia, where China wields great weight. Indonesia’s defence minister, on the other hand, has stated that he understands the alliance’s formation.

For a long time, the government has been trying to modernise its ageing air fleet, which has included F-16 fighter jets from the United States and Russian Sukhoi Su-27 and Su-30 fighter jets from Russia.

On Thursday, Indonesian President Joko Widodo met with Parly and congratulated him on the conclusion of agreements for submarine construction, satellite purchase, and ammunition manufacture.

“I hope that defence cooperation aren’t just centred on munition procurement, but also on development and joint production, technical transfer, and investment in defence sectors,” Jokowi added in the statement.

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