Reliance joint venture was a ‘trade-off’ for bagging Rafale deal: French media

New Delhi: In a fresh probe, the French investigative journal Mediapart has revealed that the alliance with Anil Ambani’s Reliance had been presented as a “trade-off” for the 36 jet deal to the aviation company to obtain the contract for the sale of Rafale jets and enter the Indian market.

The Mediapart article says the document shows a top Dassault official, Loik Segalen had explained to its staff on May 11, 2017, that the joint venture was a “trade-off”, that was “imperative and mandatory” to win the Rafale deal.

On 21 September, former French president Francois Hollande had told the same media house that France was not given an option of choosing a local partner for Dassault Aeronautics. Hollande had added that Anil Ambani’s Reliance Defence was chosen by the Indian government.

The Congress had earlier demanded Joint Parliamentary Committee (JPC) in the Rafale deal but it was rejected by Finance Minister Arun Jaitley.

‘India’s Reliance Group freely chosen’: Dassault Aviation

Dassault Aviation, however, has denied the report and said it “has freely chosen to make a partnership with India’s Reliance Group”.

Within the framework of September 2016 Inter-Govt Agreement between France and India, Dassault Aviation sold 36 Rafale aircraft to India. In compliance with Indian regulations (Defence Procurement Procedure), Dassault Aviation committed to offsets worth 50% of value of purchase. In order to deliver some of these offsets, Dassault Aviation has decided to create a joint venture. Dassault Aviation has freely chosen to make a partnership with India’s Reliance Group. This joint-venture, Dassault Reliance Aerospace Ltd (DRAL), was created February 10, 2017,” Dassault said in a press release.

Hollande’s early revelations

  • Former French president Francois Hollande had claimed in an interview to Mediapart last month that the Indian government had proposed Reliance Defence as the partner in the Rafale deal and France did not have a choice. Dassault had then clarified that the decision to partner with Reliance Defence was their own.
  • Allegations and counter-allegations escalated after Mr Hollande’s statement. The opposition has accused the government of ignoring the state-run defence company Hindustan Aeronautics Limited (HAL) to benefit Anil Ambani. Both the government and the industrialist have rubbished the charge.

Rafale deal over years

  • The previous Congress-led UPA government had negotiated with Dassault for 126 Rafale jets under which 18 jets were to be sent in a fly-away condition and 108 were to be assembled in India by HAL. However, the UPA could not seal the deal.
  • In the new deal, personally negotiated by PM Modi, Anil Ambani’s firm became Dassault’s key offset partner. As part of the offset clause, Dassault has to ensure that business worth at least half the money — Rs.30,000 crore — is generated in India.
  • Prime Minister Narendra Modi had announced the procurement of a batch of 36 Rafale jets after holding talks with the then French President Hollande on April 10, 2015 in Paris.

Defence Minister Nirmala Sitharaman leaves for France on a three-day visit, which comes in the backdrop of a big controversy over the purchase of 36 Rafale jets from French aerospace major Dassault Aviation.