Hollande's Rafale shocker: Dassault claims it was free to pick Indian partner; Congress cries cronyism, collusion

FP Staff
The government reiterated that it had no role in the selection of Reliance Defence as the Offset partner in Rafale deal.

Reactions have flown thick and fast since former French president François Hollande indicated that the Indian government pushed Dassault to partner with Reliance Defence for the Rs 58,000 crore Rafale fighter jet deal.

Domestically, while the defence ministry has come out with a standard we-had-no-role-we-are-probing-it response, the Opposition is lapping up the prized opportunity it got to make Rafale Narendra Modi's Bofors. Internationally, the French government and Dassault Aviation, the makers of the fighter aircrafts, have each come out with their statements. We summarised the complex web of claims and counterclaims for our readers:

François Hollande, former French president

The multi-million dollar defence deal has been a simmering potboiler of controversies ever-since Prime Minister Narendra Modi, in a surprise move, suddenly announced signing of a fresh deal with France during his official tour to the country in April 2015. However, pivot of the most recent set of allegations and counter-allegations is centred on an interview given by France's then president François Hollande to a local journal Mediapart.

In response to a question on Rafale deal, Hollande told a French journalist that Dassault Aviation had no choice but to take the business offered to it and that the French government had no role in picking Reliance Defence over public sector Hindustan Aeronautic Limited (HAL). What many argue Hollande stopped short of saying is that the Government of India pushed for a private sector firm to be chosen as a business partner in the deal.

The French media report quoted Hollande as saying, "We did not have a say in this...the Indian government proposed this service group and Dassault negotiated with (Anil) Ambani group. We did not have a choice, we took the partner who was given to us."

What Hollande's statement does in effect is it contradicts the Indian government's claim that the agreement between Dassault and the Indian firm was a commercial pact between two private parties and the government had nothing to do with it.

Government of India

The Ministry of Defence was quick in their response to Hollande's statement. The defence spokesperson put out a guarded official response saying that neither country's government had a role in choosing a business partner for Dassault Aviations and they would investigate the statements attributed to Hollande.

"The report referring to former French president's statement that Government of India insisted upon a particular firm as offset partner for the Dassault Aviation in Rafale is being verified. It is reiterated that neither Government of India nor French government had any say in the commercial decision," the defence spokesperson said.

However, apart from the above tweet by the defence spokesperson, no one from the government has come out with a response on the issue. Finance Minister Arun Jaitley and Defence Minister Nirmala Sitharaman, both of whom have vociferously denied the government's role in promoting a private firm over public-owned HAL are also yet to put out an official response.

Indian National Congress party

Unsurprisingly, the Congress party, which has been labeling the Rafale deal a scam, stepped up its attack against the government alleging that the government's "complicity, collusion and conspiracy" to benefit Modi's "crony friend" has been exposed. In a statement on Twitter, the Congress said that Hollande's statement "exposes the web of lies spun by the Modi government".

Congress president Rahul Gandhi tweeted:

Congress spokesperson Priyanka Chaturvedi alleged that "Rafale Minister" and "Reliance Defence's Publicity Minister" colluded to throw HAL out of the deal and hand it over to their dear friend. "National Security can go take a hike. Yaara teri yaari, desh se zyaada pyaari," she said, according to PTI.

The Congress has been accusing massive irregularities in the deal, alleging that the government was procuring each aircraft at a cost of over Rs 1,670 crore as against Rs 526 crore finalised by the UPA government when it was negotiating procurement of 126 Rafale jets.

The Congress has also alleged that the government was benefitting Reliance Defence through the deal as the company has set up a joint venture with Dassault Aviation to execute the offset obligation for the deal.

The Opposition parties have also alleged that the Reliance Defence was formed just 12 days before the announcement of the Rafale deal by the prime minister on 10 April 2015. The Reliance group has rejected these charges.

French Government

Following Hollande's statement, the French government on Friday night clarified that they were not involved in the choice of Indian industrial partners. The French government said their role was just to ensure the "delivery and quality of the aircraft".

"The French government is in no manner involved in the choice of Indian industrial partners who have been, are being, or will be selected by French companies," a statement by the French government said. It also added that the French companies enjoy the freedom to select their business partners.

"In accordance with India's acquisition procedure, French companies have the full freedom to choose the Indian partner companies that they consider to be the most relevant, then present for the Indian government's approval the offsets projects that they wish to execute in India with these local partners so as to fulfil their obligations in this regard," the French government's Ministry of Europe and Foreign Affairs said in a statement.

Dassault Aviation

Dassault Aviation, the makers of Rafale, had chosen Reliance Defence as its partner to fulfill offset obligations of the deal, which includes generating business worth Rs 30,000 crore in India.

On Friday's controversy, the Dassault Aviation clarified that the government-to-government contract between India and France was separate from its negotiations with Reliance Defence. It said that its CEO "chose" the private sector firm and the city of Nagpur for setting up the plant for manufacturing parts of the aircraft.

"This offsets contract is delivered in compliance with the Defence Procurement Procedure (DPP) 2016 regulations. In this framework, and in accordance with the policy of Make in India, Dassault Aviation has decided to make a partnership with India's Reliance Group. This is Dassault Aviation's choice..."

In April 2018, Trappier had told Liveminthat the aviation company had 'chosen' Reliance Aviation as their partner and they stand by that choice.

"We are going to prepare for the RFI. There is a process for the RFI which is to be followed by a RFP (request for proposal). We have a partnership with Reliance, part of the offset obligations of the Rafale deal. It was our choice, we continue with our choice," he had said.

Under India's offset policy, foreign defence entities are mandated to spend at least 30 percent of the total contract value in India through procurement of components or setting up of research and development facilities.

Ten days after India sealed the government-to-government agreement on the Rafale deal, Reliance Defence and Dassault had announced a joint venture (JV) Dassault Reliance Aerospace Limited (DRAL) in the aerospace sector and a year later, the foundation stone of a manufacturing facility was laid in Mihan, Nagpur.

Antonne Rouget, French journalist who interviewed Hollande

Speaking to NDTV, Rouget whose interview of Hollande is at the eye of the storm, said that the former French president clearly told him that the name of the Indian partner came from the Indian government.

"We revealed the underside of the sale of the 36 Rafales manufactured by the French group Dassault for India. As part of this investigation, we questioned Hollande who was the French president until 2017 and who managed this dossier personally. And he clearly told us that in the context of the discussions around the Rafale contract, the Indian partner of the Dassault group, on the sidelines, was proposed by the Indian government..." Rouget told the news channel.

Rouget said that Hollande told him that he was personally not aware of the Reliance group's and its owner Anil Ambani's history. "He (Hollande) clearly told us he did not know this group," Rouget said.

He also claimed that defence analysts in France have expressed concerns over the choice of the Indian business partner €" which he said might be "financially powerful but has no experience" in defence equipment manufacturing €" for Dassault, "a group of international reputation with a serious image".

With inputs from agencies

Also See: Rafale deal: Narendra Modi betrayed India, dishonoured soldiers' blood, says Rahul Gandhi after Hollande sets off fresh row

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Rahul Gandhi accuses Nirmala Sitharaman of 'lying' about HAL's ability to build Rafale aircrafts, demands minister's resignation

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