The Rattle of Rafale

Ambanis are back in the news. As Anil Ambani-led Reliance Group has sent legal notices to several Congress leaders asking them to "Cease and desist" from levelling charges of unholy nexus between the Modi government and the corporate world, Congress party is now doubly encouraged to divert its full energy to concentrate on the Rafale deal. No doubt the Bharatiya Janata Party (BJP) has been caught on wrong foot. Ever since the Congress party launched a frontal attack on Modi over the fishy business of French aircraft deal involving alleged 'cut-money' to the tune of crores of rupees, the Modis have been on the defensive. Their leaders are taking special pains to offer explanation to the nation that industrialist-politician friendship is a time-tested phenomenon in Indian politics. After all the father of nation—Mahatma Gandhi—used to enjoy the close company of Birlas. So Modi had done nothing wrong by courting the Ambanis. The point at issue is why they are not making the deal public and how favouratism has been shown to the Ambanis. Defence deals always involve huge underhand money transfer and 'Rafale' cannot be an exception to the rule if one scrutinises previous defence purchases.

Despite repeated attacks by the Congress and its new President Rahul Gandhi the government is in no position to make the deal public. The security perception as raised by the government is vague—it is too vague to be taken seriously. The way an industrialist is serving legal notice to some leaders of the oldest national party of India speaks volumes about democracy for which the Modis are so eloquent every now and then. If anything it is a dark day for democracy. In truth Anil Ambani's legal notice has made it easier for the Congress to energise its footsoldiers to organise press conferences, as pre-planned, across the country from Autust 25 to September 6 on Rafale issue.

This Rafale business has a long history. Congress started it and now BJP is reaping harvest—maybe it is going to be bitter harvest for BJP in the coming 2019 parliamentary polls.

The Modi government has agreed to buy 36 jet aircrafts with no additional add-ons, and yet will pay Rs 1000 crore more per plane, as compared to the earlier deal. Public sector unit Hindusthan Aeronautics Limited which was part of the original negotiations, was pushed out. A newly minted company, Reliance Defence Limited of Anil Ambani bagged an off-set (off-the shelf-export obligation in contract). Such an agreement between Reliance Defence and Dassault Aviation, which makes Rafale jets, should have come after government approval. Statements of the then union foreign secretary S Jaishankar and union defence minister suggest that none of them were aware of the new deal to buy 36 jets, against 126 aircrafts, as per a Request of Proposal issued in 2007, for which Dassault had been selected, as it was the lowest bidder. Nobody in the Indian Air Force nor the union defence ministry was aware of the reduction. There were additional add-ons as per Indian specifications, as claimed by the union government of India, compared to the original request for proposal. In the joint statement of 10 April 2015, India and France mention that the 36 jets to be delivered by Dassault "and associated systems and weapons, would be delivered on the same configurations as had been tested and approved by the Indian Air Force". The off-set guidelines of the union government issued on 10 April 2016, mentioned that all off-set proposals will be processed by the Acquisition Manager and Approval of Raksha (Defence) Mantri (Minister), regardless of their value. Details of the deal are yet to be made public by the government. A private party which has had no experience in manufacturing aerospace and defence equipment has been handed enormous financial benefit. Those raising alarm about national security, have demanded an audit by the Comptroller and Auditor General of India.

In 2008, France and India, concluded a Security Agreement, which legally binds the two states to protect the declassified information provided by the partner that could impact security and operational capabilities of the defence equipment of France and India. These provisions apply to the Inter Governmental Agreement, concluded on 23 September 2016, on the acquisition of 36 Rafale aircraft carriers and their weapons. The French Defence Minister signed with India a 7.87 billion Euro deal (about Rs 59,000 crore) for 36 Rafale fighter jets. It took fifteen years to arrive at the 2016 signature. After a long competitive process of January 2012, involving international fighter aircraft manufacturers, Dassault and its partners Thales and Safran, were selected to supply 126 planes to the IAF. Under a large Transfer of Technology agreement, of the 126 planes, 18 planes were to be manufactured by Dassault in France, while the remaining 108 planes, were to be built in India, by Hindusthan Aeronautics Ltd. Reliance Defence or any other Reliance group company has not received any contract from India's ministry of defence, till date, related to 36 Rafale aircraft. As per Defence Procurement Procudure, the Union Ministry of Defence has no role in the selection of Indian partners by the foreign vendors, since 2005, when off-sets (export obligations) were first introduced in India. Except HAL, no company in India, has the experience in making fighter aircraft. Reliance will be participating in the off-set programme through Dassault Reliance Aerospace Ltd, in which Dassault holds a 49% stake, brining in its 90 years of aerospace manufacturing experience.


Vol. 51, No.9, Sep 2 - 8, 2018