Rafale deal: Seeking Transfer of Technology would not have been cost-effective, says Centre

The Centre came out with a detailed statement rebutting Congress’ allegations that it was not making a full disclosure on a 2016 pact with France to buy 36 Rafale combat jets.

Published: 07th February 2018 07:25 PM  |   Last Updated: 07th February 2018 10:58 PM   |  A+A-

AP file image of a French Air Force Rafale jet fighter. (Image used for representational purpose only)

Express News Service

NEW DELHI: The Centre on Wednesday came out with a detailed statement rebutting Congress’ allegations that it was not making a full disclosure on a 2016 pact with France to buy 36 Rafale combat jets after defence minister Nirmala Sitharaman cited secrecy clauses in Parliament on Monday.

The Modi administration said the current deal “is better in terms of capability, price, equipment, delivery, maintenance, training, etc than that notionally negotiated by the then government (UPA II) in a process it could not conclude in ten years”.

The government clarification came after Congress president Rahul Gandhi in tweets and statements to the media repeatedly questioned the Centre.

“As per ‘Article-10’ of the Inter-Governmental Agreement (IGA) between Government of India and Government of France on the purchase of Rafale aircraft, the protection of the classified information and material exchanged under IGA is governed by the provisions of the Security Agreement signed between the two nations in 2008,” Sitharaman said in reply to a question in the Rajya Sabha on Monday.

When the tender for the medium multi-role combat aircraft (of the class of the Rafale) was first floated in 2007, the cost of 126 aircraft was estimated to be $ 10 billion. The Congress and the Opposition have been demanding an explanation of the price for 36 aircraft that have been contracted by the Modi government.

The New Indian Express has been briefed by sources in the defence establishment that a break up of the current deal would translate to a little more than Rs 1600 crore per aircraft. This would include the basic platform, weapons of different types, spares, the cost of training and setting up hangars at two air bases in upper India.

But a complex corporate battle and a debate over operational requirements of the Indian Air Force now appear to loom over the Euro 7.87 billion (about Rs 59,000 crore) deal.

The controversies have largely escaped focus because of the din caused by Rahul Gandhi repeatedly badgering the Modi administration, and the Prime Minister himself, into explaining themselves.

At the end of the statement issued Wednesday evening, the government said: “Further, no Indian Offset Partner for the 2016 deal for 36 Rafale Aircraft has been so far selected by the vendor (DA) because as per the applicable guidelines, DA is free to select the Indian Offset Partners and provide their details at the time of seeking offset credits, or one year prior to discharge of offset obligation”.

But in October 2016, Anil Ambani’s Reliance Aerospace and Dassault announced the formation of a joint venture, Dassault Reliance Aerospace. The venture claimed that it would set up a facility over 200 acres near Nagpur. It was seen as the natural beneficiary of the offsets – re-investment from the profits of the deal – that have been contracted.

The earlier tender, at the time of the UPA II, had specified that the original aircraft maker would have to accept the Indian defence public sector Hindustan Aeronautics as the principal domestic partner. But that tender envisaged that 18 aircraft would be bought off-the-shelf and 108 would be license produced. The current deal by the Modi government is for 36 in flyaway condition.

But with the Centre now stating that Dassault (DA) has not yet selected its Indian partner, the field could see other players for the anticipated windfall in offsets.

Coincidentally, in 2012 – four years before the JV with Anil Ambani – Mukesh Ambani signed a separate agreement with Dassault. In a statement then, Dassault said it has entered into an “MoU with Reliance Industries Limited, India’s largest private sector company, for pursuing strategic opportunities of collaboration in the area of complex manufacturing and support in India”.

In the four years between 2012 and 2016, not only had the regime in India changed from the UPA to the NDA; the Indian Air Force was also asked to pare down its projected operational requirement for 126 Rafale-type aircraft (six squadrons) to the 36 (two squadrons) that India is now committed to. But the Modi administration noted that the IAF had selected the Rafale from the competition already.

The government on Wednesday said the Opposition was twisting facts. “This would normally not have merited a response but for the serious damage being caused by the misleading statements, sought to be repeatedly perpetrated on a serious matter of national security,” the statement says right at the beginning.

Successive governments, whether headed by the Congress or the BJP, have often refused to divulge financial details of mega defence deals saying that doing so would give away the tactical components of weapons platforms to potential adversaries.

“The demand that the government disclose the details and value of the contract for the Rafale aircraft contracted in 2016 is unrealistic,” said the statement. It said also that the UPA government’s defence minister A K Antony had put a caveat on the early tender for 126 medium multirole combat aircraft (such as the Rafale). In a file noting Antony had said he would review the contract even after due process. This had rendered a 10-year effort “futile”.


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