Rafale deal: Govt reiterates it had no role in selection of offset partners

“The government has stated earlier and again reiterates that it had no role in the selection of Reliance Defence as the offset partner,” the Defence Ministry said.

After explosive revelations by former French President Francois Hollande on the Rafale deal, defence ministry said on Saturday that “unnecessary controversies” are being sought to be created on the purported statement and reiterated that the Government had “no role in the selection of Reliance Defence as the offset partner.”

French government as well as Dassault Aviation (DA) the manufacturer of Rafale jets too issued statements reiterating the procurement procedure while neither directly denied the main point raised by Mr. Hollande.

“As per the guidelines, the vendor is to provide the details of the offset partners either at the time of seeking offset credit or one year prior to discharge of offset obligation, which in this case will be due from 2020,” the ministry said.

Commercial decision of DA

Reiterating that it is a commercial decision of the DA to tie up with Reliance Defence, the company owned by Anil Ambani, the Ministry referred to some media reports of February, 2012 which suggest that DA, within two weeks of being declared the lowest bidder for procurement of 126 aircraft by the UPA Government, had entered into a pact for partnership with Reliance Industries in defence sector.

However, it must be noted that the 2012 pact was with Reliance Industries of Mukesh Ambani which had later exited the defence business.

‘No role of Indian industrial partners’

French Government said in a statement that they had no role in “the choice of Indian industrial partners” while DA said it was their choice of selecting Reliance Defence as the local offset partner. However, the two statement did not directly deny the claim by Mr.  Hollande that it was the Indian Government which proposed the name of Reliance Defence.

“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. In accordance with India’s acquisition procedure, French companies have the full freedom to choose the Indian partner companies…,” Spokesperson of the French Ministry of Europe and Foreign Affairs said in a statement late on Friday.

The statement added that the Inter-Governmental Agreement (IGA) signed on September 23, 2016 between the French and Indian governments for 36 Rafale aircraft concerns the obligations of the French government “solely with regard to ensuring the delivery and quality of this equipment.”

Hollande’s statement

Mr. Hollande told a French news outlet on Friday that his government didn’t have “a choice” in the selection of Reliance Defence. “It is the Indian government who has proposed this service group and it is Dassault that has negotiated with Ambani. We didn’t have a choice, we took the interlocutor that was given to us,” he was quoted as saying.

DA said that in addition to the IGA, there is a separate contract which commits them to “make compensation investments (offsets) in India” worth 50 per cent of the value of the purchase.

“In this framework, and in accordance with the policy of Make in India, DA has decided to make a partnership with India’s Reliance Group. This is DA’s choice, as CEO Eric Trappier had explained in an interview…,” the company said in a statement.

Under this, DA and Reliance group have set up a Joint Venture Dassault Reliance Aerospace Ltd in Nagpur Nagpur for “manufacturing parts for Falcon and Rafale aircraft.”

Both the statements pointed that several other such agreements were signed by other French companies with both public and private firms in India. “Other negotiations are ongoing with a hundred-odd other potential partners,” DA added.