Published On: Thu, Nov 16th, 2017

Rafale deal will benefit India’s defence industry, not just one firm: French diplomat

A file photo of a Rafale fighter jet. The Congress has alleged that a ‘huge scam’ was brewing in the NDA government over the deal to purchase 36 Rafale fighter jets from France. Photo: Reuters

 Dassault Aviation SA’s pact with India to sell 36 Rafale medium-range multi-role fighter aircraft would benefit a number of companies which are part of the country’s defence manufacturing industry and not just one single company, as charged by India’s key opposition Congress, a French diplomat said on Wednesday.

Dassault had been selected through a fully transparent procedure, the diplomat said on condition of anonymity. The company has fully complied with India’s rules and regulations while making its pitch to sell its fighter aircraft to India, the diplomat said.

The comments were in response to charges levelled by the Congress party, which on Tuesday said that a “huge scam” was brewing in the Bharatiya Janata Party-led National Democratic Alliance government over the deal to purchase 36 Rafale fighter jets from France. The aircraft were being bought at an “inflated price,” Congress party spokesman Randeep Surjewala said, according to a PTI report.

“I am not going to enter into domestic political matters and I strongly believe that this is a domestic political matter,” said the French diplomat cited above.

“It is not benefitting one single player, certainly not,” said the diplomat. “What I can say about the Rafale is that this omni-role fighter jet has been selected for its outstanding performance and for its competitive price and it’s been selected after a fully transparent procedure, fully compliant with the rules and regulations of this country,” he said.

According to the diplomat, the contract to buy 36 aircraft had in it an unusual clause which said that Dassault and its partners would invest as much as 50% of the cost of the deal in the Indian defence industry under the so-called offsets clause.

This share of 50% would “contribute very positively to the development of the defence industry in India,” he said; these offsets are not only being implemented by Dassault alone but by associated French companies as well. This in turn meant that many Indian companies—large and small—would be benefitting from the pact and not just one company, the diplomat said.

According to the Congress party’s Surjewala, when it was in government in 2012, it had negotiated with the French to acquire 126 aircraft for $10.2 billion with the transfer of technology. It was decided that 18 aircraft would come in a flyaway condition while the remaining 108 would be manufactured in India by the state-run Hindustan Aeronautics Ltd.

The Narendra Modi-led NDA government that took office in 2014 cancelled that deal in 2015 and decided to buy 36 aircraft at $8.7 billion without the transfer of technology provision.

According to Surjewala, private firm Reliance Defence Ltd then tied up with Dassault Aviation for a joint venture for defence production in India on 3 October 2016, PTI reported. Reliance Defence has denied any wrongdoing in the matter, calling the allegations “baseless and unfounded,” according to PTI.

The ruling BJP rubbished the Congress allegations, claiming it was intended to “divert attention” as the opposition party’s leaders faced the prospect of being questioned over alleged irregularities related to the purchase of Augusta Westland helicopters when that party was in power.

“Modi government is known for integrity and all its actions are above board, while the Congress party is synonymous with sleaze, corruption and crony capitalism,” BJP spokesman G.V.L. Narasimha Rao told PTI.