The Congress on Tuesday accused the government of compromising national security and interest in the purchase of 36 Rafale aircraft, a charge dismissed by the BJP as an attempt to divert attention from the AgustaWestland chopper scandal.
Although the then Congress-led United Progressive Alliance (UPA) government had signed a deal with Dassault Aviation in 2012 for the purchase of 126 aircraft, the BJP-led National Democratic Alliance (NDA) said it was not viable and structured to fail. The NDA bought 36 Rafale fighters in a so-called G2G (government to government) deal.
Congress spokesperson Randeep Singh Surjewala said in a press briefing that the new deal meant each fighter would cost Rs 1,570 crore as against Rs 526 crore under the older deal.
A spokesperson for India’s defence ministry didn’t respond to a request seeking comment.
He also claimed the NDA government dropped a key provision in the 2012 agreement with Dassault Aviation of France, which mandated the transfer of technology to a reputable public sector undertaking, Hindustan Aeronautics Limited (HAL).
One of the reasons for the delay in the 2012 deal was that Dassault was not keen on transferring technology to an Indian company that wasn’t its partner.
Surjewala also linked the NDA’s deal with Dassault to a subsequent partnership between the French company and the Anil Ambani promoted Reliance Defence Limited (RDL).
“On February 16, 2017, RDL through its subsidiary Reliance Defence and Aerospace Limited inks a joint venture with Dassault Aviation for defence production. Company’s website reflects that they are undertaking offset obligations of Rs 30,000 crore with Dassault Aviation for 36 Rafale aircraft. The total cost of 36 Rafale aircraft came to Rs 60,000 crore,” Surjewala said.
“Why didn’t that JV (joint venture) go through proper procedure of approval by the Union Cabinet, Cabinet Committee on Security (CCS) and the Foreign Investment Promotion Board (FIPB)?” asked Surjewala.
Reliance Defence Limited dismissed the charges as “baseless and unfounded” and threatened to take legal action against any party disseminating “defamatory allegations”.
The firm pointed out that government policy issued on June 24, 2016 allowed for 49% FDI (Foreign Direct Investment) in the defence sector under the automatic route, without any prior approval.
“No approvals from the Union Cabinet or CCS were required for the formation of the Joint Venture company under the automatic route,” RDL said in a statement issued in Mumbai.
“Dassault Aviation selected Reliance Aerostructure Ltd as its joint venture partner. The Indian government has no role to play in this,” it added.
On the allegation that the company would undertake offset obligations of Rs 30,000 crore, RDL said the press statement issued by Dassault and Reliance on October 3, 2016 made it clear that offset obligations were to be undertaken by Dassault Reliance Aerospace joint venture company, and not by Reliance Defence.
The company said Dassault Reliance Aerospace Ltd would be only one of the key players in the discharge of offset obligations.
“Offsets of Rs 30,000 crore covers obligations of other OEMs including Thales, Safran & MBDA and not of Dassault alone… Over 500 large, medium and small Indian companies will benefit from the offsets which are nothing but an export obligation for goods and services from India.”.
The BJP hit back at the Congress with its spokesman GVL Narasimha Rao saying that the opposition party was “scared at the prospects of its bigwigs…being questioned in the AgustaWestland bribery scandal soon for alleged payoffs”.