Claims, counter claims fly as war over Rafale deal heats up

The Congress attacked the Modi government over a report in a French investigative website on Friday, which quoted the former French president as saying that the Indian government proposed the name of Anil Ambani’s Reliance Group as Dassault Aviation’s offset partner.

Congress president Rahul Gandhi asked Prime Minister Narendra Modi on Saturday to clear the air over India’s purchase of 36 Rafale jets from France and demanded a joint parliamentary committee probe into the deal a day after former French president Francois Hollande fuelled controversy by saying Reliance Defence’s choice as an offset partner of Dassault Aviation, (which makes the aircraft) was India’s .

The principal Opposition party has alleged that the National Democratic Alliance (NDA) government chose Anil Ambani’s Reliance Group over state-run Hindustan Aeronautics Limited (HAL) for an offset deal in the $8.7-billion purchase initiated in 2016.

The ministry of defence said on Saturday that “unnecessary controversy” was being created by the opposition parties.

“The government has stated earlier and again reiterates that it had no role in the selection of Reliance Defence as the Offset partner,” it said, explaining that offset partners are chosen by the supplier and that neither France nor India, in this case, had a role to play.

“As per Defence Offset Guidelines, the foreign Original Equipment Manufacturer (OEM) is free to select any Indian company as its offset partner,” the ministry said.

A report in a French investigative website on Friday quoted the former French president as saying that the Indian government proposed the name of Anil Ambani’s Reliance Group as Dassault Aviation’s offset partner.

“We had no say in this regard. The Indian government proposed this service group (Reliance Defence), and Dassault Aviation negotiated with (Anil) Ambani. We did not have a choice, we took the interlocutor who was given to us,” the website Mediapart quoted Hollande as saying.

On Saturday morning, when news agency AFP asked Hollande whether India had put pressure on Dassault to pick Reliance, the former French President , who was in Canada at the time, said he was unaware of this, and that “only Dassault can comment on this”.

Hours after Hollande’s remarks on Friday, French aerospace major Dassault said it had made the decision to partner with Reliance Defence Ltd for the deal. The French government also released a statement, saying it was not involved in the choice of the Indian partner and that French companies had complete freedom to select Indian firms for the offset part of the deal.

The Congress’s attacks on the government began within hours of the Mediapart story being published, with Gandhi tweeting on Friday that Modi had “personally negotiated & changed the #Rafale deal behind closed doors”. He renewed his attack on Saturday morning, saying Modi and Anil Ambani had carried out a “a One Hundred & Thirty Thousand Crore, SURGICAL STRIKE on the Indian Defence forces”.

On Saturday, he addressed a news conference where he said: “What I am surprised with is that PM is completely silent. Not one word has come out from the PM’s mouth on this. This is from a President of France, who had a one-to-one meeting with PM where the Rafale deal was decided”, referring to Hollande’s remarks.

Modi announced the deal to buy 36 Rafale jets after holding talks with then French president Hollande on April 10, 2015 in Paris.

The Congress president said Modi should clear his stand over the issue. “We are absolutely convinced that PM of India is corrupt. I’m trying to help him protect his office,” he said. “A joint parliamentary committee should be formed for the truth to come out,” Gandhi added.

Home minister Rajnath Singh said the verification of the French media report will reveal the truth. “One should think four times before levelling any baseless allegation. One should not make allegations without proof,” Singh said in reaction to Gandhi’s remarks.

Accusing Gandhi of helping Pakistan, Union minister Ravi Shankar Prasad asked why Gandhi was “playing into the hands of the enemy by insisting that India disclose details of the weapon system that will be added to Rafale aircraft”.

Prasad called the Gandhi family the “source of corruption” in the country, and alleged that the UPA government had decided to re-examine the Rafale deal in 2012, perhaps because the company had refused to pay bribe.

He called Gandhi’s attack on the Prime Minister “shameful and irresponsible”. “What else can you expect from someone who has become president of the Congress party not because of his capabilities, but because of his dynasty,” Prasad said.

He said each aircraft, without the weapon, was 9% cheaper than the rate negotiated by the UPA government and that the fully loaded aircraft was 20% cheaper.

BJP president Amit Shah, too, attacked Gandhi over his remarks. “Rahul Gandhi says ‘Modi Hatao’. Pakistan says ‘Modi Hatao’. Now Pakistan also supports Rahul Gandhi’s baseless allegations against PM Modi. Is Congress forming an International Mahagathbandhan against PM Modi?”

Delhi chief minister Arvind Kejriwal said the PM should call a special session of Parliament to discuss the issue.

Hollande’s comments published on Friday contradict the government’s position that it had nothing to do with Dassault Aviation selecting Reliance Defence as one of the companies that would implement its offset obligations in the Rafale deal. This has also been Ambani’s position on the matter.

NDTV later reported that Hollande’s office said he stood by his remarks made to Mediapart.

The NDA government’s decision to enter the government-to-government deal with France to buy 36 Rafale warplanes made by Dassault was announced in April 2015, with an agreement signed a little over a year later. This replaced the previous United Progressive Alliance regime’s decision to buy 126 Rafale aircraft, 108 of which were to be made in India by the state-owned Hindustan Aeronautics Ltd.

The deal has become controversial with the Opposition, led by the Congress, claiming that the price at which India is buying Rafale aircraft now is Rs 1,670 crore for each, three times the Rs 526 crore, the initial bid by the company when the UPA was trying to buy the aircraft. It has also claimed the previous deal included a technology transfer agreement with HAL.

The controversy is also regarding the offset deal signed by Dassault with the Reliance Group of Anil Ambani. The Congress claims the earlier deal was scrapped and a new one signed just to provide Ambani this opportunity. Both the government and Reliance have repeatedly denied this. The government has also said the two deals are not comparable, that cost- and timing-issues would have ensured the older deal never closed, and that the planes it has ordered come with customized weaponry. It has, however, declined to provide the exact costs for them, citing a confidentiality agreement with France, and larger, security concerns.

T Suvarna Raju, who was heading HAL till three weeks ago, told HT on September 19 that the public sector undertaking could have built Rafale fighters in India had the government managed to close the original negotiations with Dassault for the 126 fighters and that there was a work-share agreement between the two companies. However, he admitted that it would have cost HAL more to make the aircraft.

Raju’s statements became the basis for a sharper attack by the Congress, with party chief Gandhi demanding defence minister Nirmala Sitharaman’s resignation for “lying” about the capability of HAL to build the fighter aircraft and the latter claiming the Congress-led UPA was responsible for HAL’s decline, and that the decision to drop the state-owned aircraft maker from the deal was taken during the UPA’s rule.