Rafale Deal Controversy

What Is Rafale Deal Controversy?

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In April 2015, Prime Minister Narendra Modi had announced that India will buy 36 French-manufactured Rafale fighter jets off-the-shelf from Dassault, the French aircraft builder and integrator. The Rafale was chosen in 2012 over rival offers from the United States, Europe and Russia. The step was needed to upgrade India’s ageing fleet.

In September 2016, India signed an inter-governmental agreement with France, dubbed as “Rafale deal”, in which India bought 36 off-the-shelf Dassault Rafale twin-engine fighters for a price estimated to be Rs.58,000 crore or 7.8 billion Euros. Additionally, an accompanying offset clause was sealed through which France will invest 30% of the 7.8 billion Euros in India’s military aeronautics-related research programmes and 20% into local production of Rafale components.

Rafale was not India’s only choice. Several international aviation manufacturers expressed interest upon knowing the Indian government’s mammoth plan to revamp its Indian Airforce fleet by introducing MMRCAs (Medium Multi-Role Combat Aircraft).

No, it’s trickier than that. After Rafale won the contract, the Indian side and Dassault started negotiations in 2012. While it is usual for such negotiations to stretch to several months, the Rafale negotiations has been on for almost four years now. The agreement was signed only in January this year.Both India and France witnessed national election and a change in government while the negotiations were under way. Pricing was another factor. Even during the signing of the purchase agreement, both the sites couldn’t reach conclusion on the financial aspects.

Initially the deal was estimated to be worth $10.2 billion (Rs.54,000 crore). The plan included acquiring 126 aircraft, 18 of them in fly-away condition and the rest to be made in India at the Hindustan Aeronautics facility under transfer of technology.

The Modi-led BJP government, however, rowed back from the commitment of the last UPA government to buy 126 Rafales, saying the twin-engined planes would be too expensive and the deal fell through after nearly decade-long negotiations between India and France. There were a lot of hiccups over costs of the aircraft. However, faced with the dipping number of fighters and a pressing need to upgrade the Indian Air Force, Prime Minister Narendra Modi intervened and decided to buy 36 “ready-to-fly” fighters instead of trying to acquire technology from Dassault and make it in India.

In November 2016, however, a political warfare over the Rafale deal began and the Congress accused the government of causing “grave loss” of taxpayers’ money by signing the deal worth Rs. 58,000 crores. It also claimed that the Anil Ambani-led Reliance Defence Limited had been unfairly picked to be the French firm’s Indian partner. The Congress alleged that the cost of each aircraft is three times more than what the previous UPA had negotiated with France in 2012.

Mr Hollande(Former President of France) sparked political controversy in India last week by telling French news website Mediapart that Mr Modi’s government had pressured Dassault to partner with India’s Reliance Defence to meet its “offset policy”.

Officials say that due to national security reasons, there is a confidentiality clause in the Rafale deal which bars the buyer and seller from talking about the pricing, making it impossible for any government to reveal any detail about the defence deals.

The delivery of the Rafale jets is scheduled to begin from September, 2019. It may come up as a beneficial and fruitful deal for the Indian defence.

 

By- Abhinav jaiswal
Student reporter
INBA

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