Reliance was selected by Indian govt – French ex President Hollande on Reliance getting Rafale offsets

New Delhi, Sept 21 : Former French President François Hollande has said that after Indian government proposed Reliance Defence (led by Anil Ambani) for the offset clause in Rafale deal.

French journal Mediapart in an interview quoted Hollande that there was no option but to accept Reliance Defence.

After this interview was published, Ministry of Defence tweeted, “The report referring to fmr French president Mr. Hollande’s statement that GOI insisted upon a particular firm as offset partner for the Dassault Aviation in Rafale is being verified. It is reiterated that neither GoI nor French Govt had any say in the commercial decision.”

The Government of India (GOI) has maintained that both Dassault Aviation and Reliance Defence entered the agreement on their own and government has no role to play.

Delhi Chief Minister Arvind Kejriwal also tweeted, “By hiding crucial facts on Rafale deal, is Modi govt not endangering national security? Former French President’s statement directly contradicts what Modi govt had been saying so far. Can the country be taken for a ride any further ?”

The Rafale Deal Controversy is a political controversy in India related to the purchase of 36 multirole fighter aircraft for a price estimated to be  worth Rs 58,000 crore (7.8 billion Euros) by The Defence Ministry of India from France’s Dassault Aviation. Origin of the deal lies in the Indian MRCA competition.

In a controversy that has been ongoing for sometime, allegations in the controversy have resulted in a public incident in the Parliament of India during a no-confidence motion debate on 21 July 2018. Rahul Gandhi, president of the main opposition party, Indian National Congress, made what has been described as bold and direct accusations toward the Prime Minister of India, Narendra Modi. The prime minister dismissed the allegations as ‘childish’ as the program’s interactions are between the governments of India and France, without any middlemen. Both governments have officially refuted the charges.

Finance minister Arun Jaitley later dissmised the charges as “Factually False”.

The Medium Multi-Role Combat Aircraft (MMRCA) competition, also known as the MRCA tender, was a competition to supply 126 multi-role combat aircraft to the Indian Air Force (IAF). The Defence Ministry has allocated ₹55,000 crore (US$7.7 billion) for the purchase of these aircraft,[23] making it India’s single largest defence deal.[24] The MRCA tender was floated with the idea of filling the gap between its future light combat aircraft and its in-service Sukhoi Su-30MKI air superiority fighter.

On 31 January 2012, it was announced that the Dassault Rafale won the competition and has been selected for exclusive negotiations. The reasons given for selection included lower unit cost and lower overall lifecycle cost for the Rafale compared to the Eurofighter due to lower fuel consumption and simpler maintenance requirements.[26] Some reports indicated that EADS may try to re-enter the bid with a lower price quote, but MoD sources ruled out re-entry; the Rafale’s lifecycle cost per unit was about $40 million less than that of the Typhoon. MoD sources also indicated that the final value of MMRCA deal for 126 aircraft (after negotiations) was expected to be about $20–$25 billion.

Earlier in February this year the government had stated, “Unfounded allegations are being made regarding the 2016 Inter-Governmental Agreement (IGA) to procure 36 Rafale aircraft in fly-away condition from France.  This would normally not have merited a response but for the serious damage being caused by the misleading statements, sought to be repeatedly perpetrated on a serious matter of national security.

It ought to be remembered that it was under the ten-year tenure of the previous Government at the Centre that the earlier initiative of 2002 to meet requirement of the Indian Air Force (IAF) for much needed augmentation of its fighter strength ran aground.  In 2012, the then Defence Minister exercised an unprecedented personal veto on the laid down institutional process then underway for procurement of 126 Medium Multi-Role Combat Aircraft (MMRCA).  All this happened when there was an alarming decline in IAF’s fighter strength.

In another effort to twist facts, the Government is asked why it did not conduct negotiations with a particular company representing a competing fighter aircraft.  It seems to have been conveniently forgotten that the then Government itself had rejected that company’s unsolicited offer made days after closure of the bid process, declared Rafale (DA) as the L1 bidder and had commenced negotiations with it in February 2012.

The demand that the Government disclose the details and value of the contract for the Rafale aircraft contracted in 2016 is unrealistic.  [In keeping with confidentiality requirements, the UPA Government had also expressed its inability to disclose the price of various defence procurements, including in its responses to Parliament Questions]. The approximate acquisition cost of the Rafale aircraft has already been provided to the Parliament.  Provision of exact item-wise cost and other information will reveal, inter alia, details regarding the various customizations and weapons systems specially designed to augment the effectiveness and lethality of the assets, impact our military preparedness and compromise our national security.  Such details would also come under the ambit of the security agreement signed in 2008.  Thus, in not revealing the item-wise details of the contract, the Government is merely following in letter and spirit the confidentiality provisions of a bilateral India-France Agreement of 2008 signed by the previous Government.

As doubts are sought to be created about the 2016 contract for 36 aircraft, it is once again strongly reiterated that the deal secured by the Government is better in terms of capability, price, equipment, delivery, maintenance, training, etc., than that notionally negotiated by the then Government in a process it could not conclude in ten years.  Moreover, the present Government completed these negotiations in just about one year.

It is also stressed once again that the procurement of 36 Rafale aircraft through an Inter-Governmental Agreement (IGA) with France to meet the urgent need of the IAF is strictly in accordance with the Defence Procurement Procedure in all aspects including mandating, conducting and monitoring of negotiations and seeking all necessary approvals, including that of the Cabinet Committee on Security, before entering into the IGA.  The aircraft had already been evaluated successfully by IAF during 2009-10.

It may also be noted that contrary to the impression sought, to be created by the Opposition, in the earlier proposal to procure Rafale, which ended in a stalemate, there was no provision for transfer of technology but only to manufacture under licence.  The Government was unable to agree on the terms for even that in its negotiations with the vendor, resulting in the long-drawn exercise under the earlier Government ultimately turning futile.  Further, no Indian Offset Partner for the 2016 deal for 36 Rafale Aircraft has been so far selected by the vendor (DA) because as per the applicable guidelines, DA is free to select the Indian Offset Partners and provide their details at the time of seeking offset credits, or one year prior to discharge of offset obligation.”