Rafale deal
“This group did not have to give me any thanks for anything. I could not even imagine that there was any connection to a film by Julie Gayet,” Mediapart quoted Hollande as saying.
The Indian Express reported on August 31 that Ambani’s Reliance Entertainment inked a pact with Gayet to produce a film two days before Hollande attended the Republic Day celebrations as chief guest in 2016. The memorandum of understanding for supplying 36 Rafale jets was signed during that trip.
The National Democratic Alliance’s decision to enter a $8.7 billion 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 stateowned 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 R1,670 crore for each, three times the R526 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 Hindustan Aeronatics Limited (HAL).
The deal has also become controversial on account of the fact that one of the offset deals signed by Dassault is 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 for an offset deal. 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 French aerospace firm Dassault Aviation for 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. Former air chief AY Tipnis told HT that HAL may have found it challenging to build the Rafale.
The government and the Congress have been trading charges over the controversial Rs 59,000crore purchase almost every day this week, with Congress chief Rahul Gandhi demanding defence minister Nirmala Sitharaman’s resignation for “lying” on the capability of HAL to build the fighter aircraft and the latter claiming the Congressled 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.
Defence ministry officials on Wednesday reiterated there were areas of disagreement between HAL and Dassault such as work-share, responsibility sharing and man-hours required to assemble the aircraft. Only after police released Naikoo’s father that the militants set free the other civilians.