Govt Has no Role in Selection of Offset Partner: MoD on Rafale

The Defence Ministry asserted that Reliance Defence and Dassault Aviation’s JV is a “purely commercial arrangement”.

5 min read

Video Editor: Vivek Gupta

Video Producer: Shohini Bose

A day after former French President Francois Hollande said the Narendra Modi government picked Anil Ambani’s Reliance Defence for Rafale deal, the Defence Ministry on Saturday, 22 September, reiterated that the "Government of India has no role in the selection of Indian Offset partner which is a commercial decision of the Original Equipment Manufacturer".

The Ministry also asserted that Reliance Defence and Dassault Aviation's joint venture is a "purely commercial arrangement between two private companies".

Unnecessary controversies are being sought to be created following media reports regarding a statement purportedly made by the former French President, Francois Hollande, concerning the selection of Reliance Defence as the Offset partner by Dassault... The reported statement perhaps needs to be seen in its full context – where the French media has raised issues of conflict of interest involving persons close to the former President. His subsequent statements are also relevant in this regard.
Ministry of Defence statement

Earlier on Friday. the Defence Ministry had tweeted that neither the Indian nor French government had any role to play in the commercial decision.


Modi Govt Chose Ambani, Hollande Reaffirms

Meanwhile, former French President Francois Hollande reaffirmed his statement on Saturday that the Modi government picked Anil Ambani’s Reliance Defence for the Rafale deal.

Hollande stands by his statement, his office told NDTV.

In a shocking development on the Rafale deal fiasco, Hollande on Friday, 21 September, had told a French news website, Mediapart, that his government was not given a choice in selecting a local partner for Dassault Aviation, the French aeronautics company responsible for manufacturing the jets for India.

However, Dassault Aviation countered Hollande’s claim, saying that it was the company’s “choice” to work with Anil Ambani’s Reliance Group.

He had also cleared the air surrounding media reports that Ambani’s Reliance Entertainment had signed an agreement with his partner, Julie Gayet, to produce a film just two days before Hollande attended Republic Day celebrations in 2016.

It was on that same visit that Hollande sealed the deal with Modi to deliver 36 aircraft.

The Indian government proposed this service group (Reliance), and Dassault negotiated with Ambani. We did not have a choice. We took the interlocutor who was given to us. That’s why, on the other hand, this group did not have to give me any thanks for anything. I could not even imagine that there was any connection to a film by Gayet.
Francois Hollande

The former French president added that initially the deal was of 126 planes, but when the government in India changed, the deal also changed.

“Initially, the deal was supposed to be for 126 planes, then when the government changed, the Indians reformulated their proposition, less attractive for us because it was for 36 aircraft only. But the manufacturing was planned to be in France, contrary to the preceding proposition, so we lost on the one hand and gained on the other.”

Hollande’s statement came at a time when the ruling government is under severe criticism by critics and the Opposition over Reliance not having adequate experience to be chosen as the local partner.

Ambani himself, in a letter to Rahul Gandhi, said that the government had no role in Dassault picking Reliance. The government has also denied any involvement in Dassault picking Reliance. In fact, it claimed that it was up to Dassault to choose a local partner.


Dassault’s Counter to Hollande’s Claim

In a statement released by Dassault Aviation, the company said, “This (working with India’s Reliance Group) is Dassault Aviation’s choice,” the statement read.

“This offsets contract’s delivered in compliance with DPP 2016 regulations. In this framework and in accordance with the policy of Make in India, Dassault Aviation has decided to make partnership with India’s Reliance Group.”
Statement by Dassault Aviation
The Defence Ministry asserted that Reliance Defence and Dassault Aviation’s JV is a “purely commercial arrangement”.

In its statement, the French aviation company also mentioned that their position had earlier been clarified by the company CEO, Eric Trappier, in an interview to Mint.

In an article published on 16 April 2018, Trappier had said, “We have a partnership with Reliance, part of the offset obligations of the Rafale deal. It was our choice, we continue with our choice.”


Not Involved in Choice of Indian Partners: French Govt

Hours after Hollande’s statement, the French government said it was in no manner involved in the choice of the Indian industrial partners.

“The intergovernmental agreement signed on 23 September 2016 between the French and Indian governments for supplying India with 36 Rafale aircraft concerns the obligations of the French government solely with regard to ensuring the delivery and quality of this equipment,” the statement read.

But they further said full freedom is given to French companies to choose Indian partners.

“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 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 fulfill their obligations in this regard. As it happens, agreements have already been signed by French companies with many Indian firms, both public and private, under the framework of Indian laws.”
Statement by French Government

Hollande Exposes the Web of Lies: Congress

The Congress had taken to Twitter to slam Bharatiya Janata Party’s (BJP’s) claims on the Reliance-Dassault tie-up, calling them a “web of lies”.

This is what senior advocate Prashant Bhushan had to say:


What's the Rafale Deal?

The deal between India and France for the former to procure 36 Rafale aircraft from the latter was signed on 23 September 2016. In October 2016, the joined venture between Reliance and Dassault was announced, with Reliance Defence being part of the offset programme and holding a 51 percent stake in Dassault Reliance Aerospace Ltd (the remaining 49 percent owned by Dassault Aviation).

The foundation stone for a production facility was laid by Dassault's Eric Trappier and Anil Ambani under the joint venture in October 2017, two months before the release of Julie Gayet's film, reported Scroll.

The Opposition's criticism over the Rafale deal has emphasised on preference being given to Ambani's Reliance over Hindustan Aeronautics Limited (HAL), which was to originally be part of the deal.

(With inputs from The Hindustan Times and Scroll)

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