/The Rafale Deal Controversy. All that you need to know…

The Rafale Deal Controversy. All that you need to know…

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Corruption allegations around a defence deal is not new to this country. The allegations often become louder around election time and with the general elections next year, the controversy around the prompt and unilateral decision of Prime Minister Narendra Modi to buy 36 Rafale aircrafts is catching momentum.

For months now, the Congress and some social activists have been raising concerns about the price of the deal and the choice of offset partner. With the issue now before the Supreme Court, it has now gained some traction. On October 31, without commenting anything on the legitimacy of the deal the Supreme Court ordered the Central Government to place before it in a sealed cover the information regarding the cost, the details of the decision-making process and the induction of the offset partner.

The Supreme Court articulated that it is not questioning the suitability of Rafale jet aircrafts but requires a report in a sealed cover detailing the various stages of the decision-making process leading to the award of the 36 aircrafts. Every defence procurement by the country is made under the Defence Procurement Procedure (DPP) formulated under the NDA government led by Atal Bihari Vajpayee in 2002 to which necessary changes have been made from time to time.

The whole process of finalising the procurement under DPP is so elaborate that from the time in 1999, when the India Air Force informed the Ministry of Defence that it required 126 aircrafts to maintain its fleet strength, it took 13 years to finalise Rafale as the IAF’s choice in 2012. After years of exchange between the IAF and the Central government first under the NDA and then UPA, it was decided in 2004 to procure Medium Multi Role Combat Aircraft and a final go-ahead for the procurement was given by the Defence Acquisition Council in 2007.

A detailed Request For Proposal (RFP) was then made by the UPA government to six global manufacturers for combat aircraft. The RFP was so meticulously formulated that it took the defence publications around the world labelled it “the most elaborate and detailed RFP in the history of defence aviation business” for “the mother of all deals in defence aviation.”

After finalisation, Dassault and the government started negotiations and meanwhile Dassault signed a work-share agreement with Hindustan Aeronautics Limited under which HAL was to undertake 70 percent of the manufacturing and the Dassault the rest.

Meanwhile, the Central Government changed and the NDA was once again in power albeit under Narendra Modi this time. Amidst all the murmurs of the Rafale deal price going up due to delay and questions on guarantee around the 108 aricrafts to be manufactured by the HAL, Prime Minister Modi on an official trip to France on April 10, 2015 made a rather shocking announcement ” I have asked President Francois Hollande to supply ready to fly 36 Rafale jets to India.”

The Indian media went gaga over the unprecedented prompt and bold decision of Modi to acquire 36 Rafale jets which they believed was a separate deal in addition to 126 aircrafts for which the negotiations were 95 percent complete as per a statement by Dassault in March, 2015. It later became clear that the earlier deal to purchase 126 aircrafts had been scrapped.

The decision came as a shock to many including Modi’s own Cabinet Ministers but the person who was placed in the worst case scenario was the then defence minister Manohar Parrikar who went from channel to channel claiming that the decision was unilaterally taken by Modi and defending the decision claiming that India did not have the money to purchase 126 jets which would have cost Rs 90,000 crore including the waepons system.

All hell broke loose when 17 months later in September 2016, the formal contract was signed and deal was announced as 7.9 billion euros (Rs 59,000 crore) for 36 aircrafts. While the government got engaged in defending the deal, another point of controversy arose around the choice of the offset partner.

Anil Ambani’s Reliance Aerostructure Limited, subsidiary of Reliance Defence Limited, was chosen as an offset partner in place of HAL. The Reliance Defence Limited was incorporated two weeks prior to Modi’s announcement by Anil Dhirubhai Ambani Group that was more than Rs 1,20,000 crore in debt by the end of March, 2015. In September 2018, France’s former President Hollande made a rather stunning  claim to a French publication that the Indian government wanted Reliance as the offset partner and the same was rather a neccessary condition.

However, Dassault Aviation CEO Eric Trappier has denied any wrongdoing, saying “I don’t lie”. On the pricing issue, Trappier said the present aircraft are “cheaper by 9 per cent” and the “price of Rafale in flyaway condition is less expensive in the 36 contract than the 126 contract”

The Modi government faces number of questions regarding the deal which have remained unanswered.

Why was the original deal scrapped when almost 95 percent of the negotiations were done?   Why was HAL left out in the new deal? Why was newly incorporated debt ridden with zero prior experience Reliance made the offset partner? Did the Modi government propose Reliance’s name? If yes, then why? How did the price of aircrafts increased so much? What in fact is the real price of the aircrafts and why is the government keeping it all under covers?

The Government has sought the protection of Official Secrets Act for which the Supreme Court has asked for an affidavit stating reasons necessitating secrecy.

After an eventful hearing  on November 14, The three judges bench of Supreme Court comprising Chief Justice Ranjan Gogoi, Justices S K Kaul and K M Joseph has reserved judgment on the petitions questioning the Rafale deal and seeking court-monitored CBI probe into it.