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• Former Defence Minister Nirmala Sitharaman said that the prices could not be compared as the tender for 126 aircraft and the agreement for 36 aircraft had different requirements.


• The Central government also claimed that it did not have any role in the selection of the Indian offset partner. (However, Francois Hollande, who was the President of France when the Rafale deal was signed, stated in an interview that it was the Indian government that suggested Reliance Defence Ltd. as the offset partner for the deal. And Dassault Aviation’s chief executive officer, Eric Trappier, in November 2018, said that it was his company that chose Reliance Defence).


• Nirmala Sitharaman also said that approval from the Cabinet Committee on Security had been obtained before the signing of IGA.

Supreme Court order

In October 2018, the Supreme Court, while hearing a public interest litigation, directed the Central government to provide the pricing details of the Rafale fighter jets in a sealed cover. In December 2018, the court dismissed all the petitions seeking a probe into the alleged irregularities in the deal, and gave a clean chit to the Union government on all three aspects – the decision making, pricing and selection of Indian offset partner. However, petitioners have sought a review of the December 2018 order following which the Union government wants all review petitions dismissed by the apex court.

 

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Price escalation

The Congress Party alleged that the BJP-led government procured each aircraft at a much higher price than what was finalised by the UPA government.

Lack of transparency & favouritism

The party accused the Central government of promoting crony capitalism by ‘influencing’ Dassault to pick Reliance Defence as its local partner. The party demanded answers from the government on why state-run aerospace major HAL was not involved in the deal. It also alleged that Reliance Defence was formed just 12 days before the announcement of the Refale deal and that Reliance was chosen in a process that lacked transparency.

Absence of Cabinet approval

It alleged that the Modi government announced the deal without the approval from Cabinet Committee on Security. The Congress demanded a probe into the issue.

Parallel parleys

Based on documents from the Ministry of Defence, it was alleged that the Prime Minister’s Office was conducting ‘parallel negotiation’ with French officials on the fighter plane deal.

 

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The proposal for procurement of fighter jets was made in 2007 under the Congress-led UPA government. The French aircraft manufacturer, Dassault Aviation, won the contract among other bidders in 2012. The original plan was to purchase 126 planes, including 18 to be manufactured in France and delivered in flyaway condition and the rest (108) to be built in India in collaboration with the Hindustan Aeronautics Ltd under transfer of technology.

There were lengthy negotiations between the then UPA government and Dassault on issues of pricing and transfer of technology. The negotitations continued till early 2014, but the deal was not finalised. Meanwhile, India and France faced national elections. A change in government in India delayed the process further.

During his visit to France in 2015, Prime Minister Narendra Modi made a surprise announcement that India would purchase 36 Rafale jets (as against the earlier tender for 126) from the French aircraft manufacturer Dassault Aviation. And the deal was sealed in September 2016.

The cost of each Rafale aircraft was later revealed to be Rs. 670 crore. But the Central government did not provide the break-up of the deal, citing security concerns.

 

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Rafale is a twin-engine Medium Multi-Role Combat Aircraft (MMRCA) designed and built by Dassault Aviation, a French firm. The fighter jets are capable of performing a wide range of combat roles.

In September 2016, India and France signed a 7.87 billion (at Rs. 59,000 crore) Inter-governmental Agreement (IGA) for 36 Refale multi-role fighter jets in “flyaway condition” (prepared for immediate flight). The deal also included a 50% offset clause to be executed by Dassault Aviation in partnership with Indian companies. That is, in exchange for landing the contract for the 36 fighter jets, Dassault has to invest half the value of the deal – about Rs.30,000 crores – in Indian firms. The Reliance Defence Limited has been chosen as the offset partner.

As per the IGA, deliveries were to begin 36 months from signing of the contract and Dassault has almost met the deadline.

 

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Defence Minister Rajnath Singh is set to receive the first of the 3 Rafale fighter jets at a ceremony in Paris on October 8. However, the remaining of the first batch of jets will arrive in India only by April-May 2020. Meanwhile, three batches of eight IAF pilots, along with engineers and technicians, will undergo advanced training on the fighter jets in France.

In September 2016, India inked an inter-governmental agreement (IGA) with France for procurement of 36 Rafale fighter jets at a cost of 7.87-billion (approximately Rs 59,000 crore).

Ever since, questions have been raised about the cost agreed on for the aircraft and the choice of Anil Ambani’s firm, the Reliance Defence Ltd (RDL), as the offset partner, over the experienced Hindustan Aeronautics Ltd (HAL).

While the Congress and other opposition parties alleged massive irregularities in the deal, the BJP-led government, which signed the agreement with France in 2016, denied the allegations. And the Supreme Court gave a clean chit to the Union government in December 2018, saying it did not find any wrongdoing in the defence deal.

 

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