Former French President Francois Hollande caused a huge stir this week with his statement on the Indo-French Rafale deal. Hollande, who was the president of France when the Modi government hatched a fresh deal on the Rafale deal, said Anil Ambani’s Reliance Defence was recommended by the Indian government. The French government, Hollande said, had no say in the matter.
The Rafale deal has been the Modi government’s Achilles heel, especially over the past year or so, with the Opposition raising questions on the process behind changing the 126-fighter jet deal at the last moment. Questions were especially raised on the decision to drop Hindustan Aeronautics Limited (HAL) as offset partner from the deal and replace it with Reliance Defence, which had little experience in defence manufacturing.
The deal was also rectified from that of 126 jets to just 36, which the government claimed they were purchasing in “fly-away” condition for the same price.
Hollande’s statement, therefore, has seemingly validated the Opposition’s claims of “crony capitalism” by the BJP, and has also exposed the BJP’s shifting goalposts when it came to the matter.
“UPA Failed To Iron Out Disagreements”
After Modi’s Paris announcement on 10 April 10 2015, where the change in the deal was announced, the government stated that the step was needed to be taken because the UPA couldn’t negotiate between French company Dassault Aviation and HAL.
On November 18 2017, Defence Minister Nirmal Sitharaman said:
Finance Minister Arun Jaitley added to that by saying it was a “government-to-government transaction”and the procedure for the new deal was “different”.
According to a report by The Wire, however, just 15 days before the Paris announcement, Dassault Aviation CEO Eric Trappier said in a press conference that contract negotiations with India on the 126-aircraft deal was 95 percent completed. Then what was this “delay” that the Indian government is talking about?
What also caught public eye was that the deal of roughly 7.8 billion Euros that the UPA had hatched for 126 jets remained the same even for 36 jets. Defending this, Sitharaman said:
“The cost of the 36 Rafale aircraft cannot be directly compared with the cost under the original MMRCA proposal as deliverables are significantly different.”
Additionally, she said:
“Poor State Of Affairs At HAL”
However, recently, the government has shifted gears from just blaming the UPA to also blaming the “poor state of affairs” at HAL, which is a PSU and falls under the defence ministry. Questioning HAL’s capability, Sitharaman had said former Defence Minister AK Antony had pulled HAL out of the deal as negotiations between the firm and Dassault couldn’t be made during his tenure; a statement opposed vehemently by the Congress.
Sitharaman’s statement was also opposed by HAL’s former boss, T Suvarna Raju.
“When HAL can build a 25-tonne Sukhoi-30, a fourth-generation fighter jet that forms the mainstay of the air force, from raw material stage, then what are we talking about? We could have definitely done it (licence produced the Rafale jets),” Raju said.
Furthermore, according to The Wire’s report, a month before the change in the deal was announced by Modi in April 2015, Dassault CEO Trappier presented his company’s 2014 annual report which stated, “the continuation of exclusive negotiations with the Indian authorities and Indian industrial partners to finalise the contract for the sale / licensing of 126 RAFALE”.
In other words, as per the report, Dassault’s own document shows that, as on 10 March 2015, negotiations between Dassault Aviation and the Government of India/HAL had not failed as Nirmala Sitharaman claims.
All in all, less than a month before Modi’s Paris announcement, Dassault Aviation’s CEO claimed 95 percent work of the 126-aircraft deal was over, that it had signed a work-share agreement with HAL.
However, now, the BJP maintains that it is because of various inefficiencies and high cost associated with a HAL-Dassault co-production that Dassault was forced to choose a company with almost no experience in aviation manufacturing.
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