By Elton Gomes
In a new twist to the ongoing controversy in the Rafale arms deal, former French president Francois Hollande said that Dassault Aviation did not have any choice but to partner with Anil Ambani-led Reliance Defence for the offset clause in the fighter jet deal.
When Hollande was questioned about who selected Reliance as a partner and why the former French President said it was the Indian government that proposed Reliances name and that Dassault had no option but to choose the company that was given to it. Hollandes full interview has been published in the French magazine, Mediapart.
What Hollande said?
“We did not have a say in that. The Indian government proposed this service group, and Dassault negotiated with Ambani. We did not have a choice, we took the interlocutor we were given,” Hollande said, ANI reported. The interview was published in French and some of its excerpts were tweeted by Julien Boissou, French newspaper LeMondes South Asia correspondent.
Recent reports from Hollandes office said that the former president stood by his claims, though the French government and Dassault Aviation have rejected his statement.
France, Dassault contradict Hollande
After Hollandes statements, the French government clarified its stance, saying, “The French government is in no manner involved in the choice of Indian industrial partners who have been, are being, or will be selected by French companies,” as per an NDTV report.
The statement from the French government noted that French companies had complete freedom in choosing to partner with Indian companies in the Rafale deal. “In accordance with India’s acquisition procedure, French companies have the full freedom to choose the Indian partner companies that they consider to be the most relevant, then present for the Indian government’s approval the offsets projects that they wish to execute in India with these local partners so as to fulfil their obligations in this regard,” read the French governments statement.
Dassault Aviation, makers of the Rafale jets, said that the company chose to partner with Indias Reliance Group. “This offsets contract is delivered in compliance with the Defence Procurement Procedure (DPP) 2016 regulations. In this framework, and in accordance with the policy of ‘Make in India’, Dassault Aviation has decided to make a partnership with India’s Reliance Group. This is Dassault Aviation’s choice,” Dassault Aviation said in a statement, IANS reported. The French company added that the partnership between the two companies led to the formation of the Dassault Reliance Aerospace Ltd (DRAL) joint-venture in February 2017.
India’s defence ministry rejects Hollande’s statement
Indias Ministry of Defence (MoD) rejected Hollandes statement, and reiterated that neither GoI (Government of India) nor the French Government had any say in the commercial decision.
On Thursday, Defence Minister Nirmala Sitharaman said that the negotiations have failed for procurement of 126 Rafale jets under the previous United Progressive Alliance (UPA) government, as Hindustan Aeronautics Ltd (HAL) did not possess the required capability to produce the jets in India in collaboration with Dassault Aviation.
Dassault could not progress in the negotiations with HAL because if the aircraft were to be produced in India, a guarantee for the product to be produced was to be given. It is a big ticket item and the IAF would want the guarantee for the jets. HAL was in no position to give the guarantee, Sitharaman said, India TV reported.
Congress demands parliamentary probe in Rafale deal
Leveraging the confusion over the Rafale deal, Congress demanded a parliamentary probe in the deal. Congress President Rahul Gandhi dared Finance Minister Arun Jaitley to form a Joint Parliamentary Committee to probe the multi-billion dollar Rafale deal. Gandhis dare came hours after Jaitley accused the opposition of “peddling untruth” and carrying out a “false campaign” on the Rafale deal.
Responding to Jaitely, Gandhi said in a tweet: “Mr Jaitley, thanks for bringing the nations attention back to the GREAT #RAFALE ROBBERY! How about a Joint Parliamentary Committee to sort it out?” Gandhi then took shots at the alleged nexus between the government and the Ambanis: “Problem is, your Supreme Leader is protecting his friend, so this may be inconvenient. Do check & revert in 24 hrs. Were waiting!” DNA reported.
Anil Ambani says Dassault chose Reliance
Earlier in August, Anil Ambani’s Reliance Group denied that they received any contract from Indias Defence Ministry. The Anil Ambani-led company said that Dassault chose Reliance Defence Ltd to meet its ‘offset’ or export obligation in the contract and that the Ministry of Defence had no role in the selection of Indian partners by the foreign vendors.
Rajesh Dhingra, CEO of Reliance Defence, said that the Rafale deal requires all 36 aircraft to be delivered in a ‘fly-away’ condition. This means that the aircraft are to be exported from France by Dassault” and “HAL or anyone else cannot be the production agency for the simple reason that no aircraft are to be produced in India”, Business Today reported.
What is the Rafale deal?
The UPA government decided to purchase 126 Rafale jets. However, the BJP-led NDA government cancelled the deal to procure 126 jets and announced that India will now be buying 36 French-manufactured Rafale fighter jets off-the-shelf from Dassault.
When the UPA government proposed to buy 126 jets, it was decided that India would buy 18 jets off-the-shelf, while the remaining 108 would be assembled in India by Hindustan Aeronautics Limited (HAL) in Bengaluru. Under Modi’s deal to buy 36 jets, it was decided that all 36 jets would be built in France and imported to India.
However, Dassault Aviation, the company building the Rafale jets, would have to invest half the cost of the deal in Indian companies this condition was called an offset clause. Dassault was supposed to be free to work with any Indian company it wished to, and had even made a list of 72 Indian firms. But according to a joint statement by Reliance and Dassault, Reliance Defence was a “key player” in Dassaults offset obligations.
What happens now?
Writing for Scroll.in, Rohan Venkataramakrishnan points out that none of the official responses explicitly address Hollandes comments whether or not India proposed Reliances name during Rafale negotiations.
Venkataramakrishnan then states that the Indian government will want to avoid saying that Hollande lied, as this would be a major accusation against a former foreign head of state. The Modi government will have to come clean on whether Reliances name cropped up during Rafale negotiations.
Elton Gomes is a staff writer at Qrius