It is time the prime minister spoke on Rafale and cleared the air - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Monday 24 September 2018

It is time the prime minister spoke on Rafale and cleared the air

The government’s rebuttals on Rafale deal lack conviction

By Ajai Shukla
Business Standard, 25th Sept 18 

The controversy over how the Bharatiya Janata Party-led (BJP-led) led government has gone about purchasing 36 Rafale fighters for the air force, and over the selection of Anil Ambani’s Reliance Defence group for discharging offsets related to this deal, has taken on a new dimension. Former French president, Francois Hollande, has claimed that the Indian government ordered that Dassault, which builds the Rafale in France, should enter into offset partnerships with Reliance Defence, and that Paris had no choice in the matter. Hollande’s allegation that Mr Ambani was New Delhi’s nominee directly contradicts what Defence Minister Nirmala Sitharaman and Finance Minister Arun Jaitley have been saying – that Dassault chose to partner Reliance of its own free will.

The “rebuttals” to Mr Hollande’s allegations – emanating from Paris, Dassault and New Delhi – fail to convince. The French government’s statement does not contradict Mr Hollande. Instead, it backs him in stating that Paris had no role in selecting Mr Ambani as the offset partner. It further states that the Indian procurement procedure provides full freedom to French companies to select offset partners, but that only bypasses Mr Hollande’s implicit allegation that New Delhi had violated its own procurement procedures. Similarly Dassault’s statement does not contradict Mr Hollande directly, stating only that partnering Reliance was Dassault’s choice. Whether Dassault enjoyed a free choice remains a question. New Delhi’s rebuttal, in contrast, began by directly attacking Mr Hollande, claiming that he was motivated by a “conflict of interest” relating to his personal life, since his partner, French actress Julie Gayet, was granted Euro 1.6 million of financing by a Reliance Group company in 2016. But again, for many, this sounds more like a “conflict of interest” for Mr Ambani.

While Mr Hollande has not revealed who asked Paris to discharge offsets through The Reliance Group, it is clear that Mr Modi was the interlocutor to the French president at the time the Rafale purchase was first agreed upon. The Indian government can no longer issue answers and rebuttals from officials and ministers who were not party to direct conversations between Mr Hollande and Mr Modi. Ms Sitharaman, who is the government’s points-person in the debate over the Rafale, was not even defence minister at that time; and then defence minister, Manohar Parrikar, was sitting in Delhi. Mr Jaitley was not involved in the deal in any way. The former French president has raised allegations and it is up to India’s prime minister to respond to the growing number of questions that remain unanswered.

The defence minister’s promise last year to reveal the details of the Rafale cost, and her subsequent backtracking on the grounds of inter-government confidentiality, has already created enough confusion and encouraged the impression that there is something to hide. Mr Modi’s steadfast silence will only add to this impression. On Monday, Ms Sitharaman declared that the government needed to “fight the perception battle”, for which many BJP leaders would be speaking across the country. This is unlikely to be enough. It is time for the prime minister to defend the deal himself.


  1. I think Modi is right in keeping quite.
    Lot of this questions have been asked in the parliament, they have been answered.
    He need not answer every question thrown during an election rally or a tweet.

    Anyway points to consider :
    1. A public sector unit does not have monopoly on patriotism . They do not have entitlement of tax money. TATAs, Ambanis, Mahindras Birlas , bajajs , munjals TVS Godrej all have contributed immensely to indian industrial landscape in their own way.
    2. TATAs never made cars , they made indica on their own and look what a success . Something HAL has not learnt even today after 70 years. All R&D projects cancelled or delayed.
    3. An Englishman promised to eat every pound of steel that TATAs made, look where TATA steel is now.
    4. Jamnagar was an arid area with just a few mm of rain. See the most modern petrochemical plant setup there by a team that did not have a back ground at all. That man was ambani.
    5. Maruti was a tin shed lost after Sanjay Gandhi's death till govt bought it and gave it suzuki technology . See now where it is due to suzuki .
    6. TATA aerospace had not made a single aerospace part till a few years ago. Boeing tied up with them , held their hands , they learnt the hard way. Look where they are.
    7, kalyani was not into artillery, their owners made the investments had a severe learning curve, now have world beating guns !
    8. Ajai shukla was a boy not knowing fighting when he joined the army. Army trained him for years to make an officer and a gentleman. (Now he thanklessly does not believe his own senior officers is a different story! )
    9. Bajaj has never made motor cycle till Rajeev bajaj came along . Now they have a very good line up.

    reliance defence may not have made aero components yet, but with Dassault holding their hands (51% stake) they will succeed. They will employ Indians and these Indians will be much more productive than HAL employees. The facilty setup by Dassault will be more modern than HAL can think off.

    Compared to all the above companies HAL has failed the nation completely . Is it not ?

    What is the loss GoI will under go if Dassault Reliance fail to deliver offsets ? MoD will fine them millions.(like they fined boeing recently).

    What happens if HAL delays or fails to pick up technology ? Indian tax payer picks up the tab.
    See inspite off all jaguar ToT, HAL is unable to produce spares ! IAF is importing planes to cannibalise . Scam is it not ?

    Better a pvt player in offsets.

    So what noise are you guys making ?

  2. NSR says ---

    Every government dropped the ball sinceearly 2000s...
    IAF wanted MOD to get more Mirage 2000 and the production facilities up for sale but congress government did not make any decisions...
    Instead of going for MMRCA, India should have first bought some SU-34 to replace the retiring fighter is doing pretty well in Syria...
    So the situation got worse and everyone played India...
    How did the Rafale got into MMRCA after not qualifying on requirements...that is one key question...
    How did Dassault and France refuse to transfer TOT or guarantee delivery quality when congress was in power...

    PM Modi does not heed to own anything in this Rafale mess at all or he need to explain anything at all...

    If one takes out India specific upgrades, then the price is reasonable enough considering the situation and security emergency and also a Rafale with Meteor is a formidable force multiplier...

    My personal opinion is that Armed forces need to take charge of Program Management and plan and develop products they need for future like in USA...

    By end of 2019 India will have few of Rafales +Meteor combination and Pakistan and China will not even think of coming near the borders...

    With S-400, India will be secure as I was commenting for many years...

  3. Why should the Prime Minister speak on Rafale? Just because Mr. Rahul Gandhi wants him to? Should the PM have to respond to each and every allegation made against him? I do not think so. He has far more better things to do.

    In this case, as in each and every case of an allegation, natural law dictates that the burden of proof lies with the person who alleges.

    So let Mr. Rahul Gandhi or the Congress party, showcase their evidences before a court of law and then let the law of the land take its own course. Unless a court case is filed, this is simply a battle of perception (aka Election Year campaigning) as rightly observed by BJP.

    For a person, a family and the so called "GOP", increasingly desparate for power, nothing that Mr. Modi can say or do in this matter will be enough.

  4. How better would PM defend it and do you expect it would calm this political sh*tstorm?! Already the relevant information has been given by the RM. Vested interests will keep throwing such articles to bring their masters to power

  5. Here is the cost of Rafale plane as per MoD

  6. Excellent investigation by Broadsword.
    French politicians have integrity Similiar to Indian politicians the difference being they fear the law. They are not going to tell a lie, because if ever in court the punishment is severe. The same goes for French company executives.
    So the only choice from the French side is to fudge, the only way to get to the truth, is to question them in a court of law under threat of perjury.
    It seems the Indian side has encouraged the French side to cooperate in the illegal scheme.
    If there is sufficient evidence for this then prosecution can be brought by the French authorities.
    Line of Enquiry to pursue-
    Was due diligence done by Rafale when appointing the Ambani company?
    Rafale is required by law to have done a curruption risk exposure on the Ambani company.
    French anti-corruption law issued on 9 December 2016 (Sapin II) Pursuant to Article 17-II-4 of Sapin II, “the directors should conduct due diligence procedures for assessing the situation of clients, first-tier suppliers and intermediaries “.
    Third party due diligence mainly consists of gathering documents and information about a third party so as to assess the corruption risk exposure that the company incurs in initiating or continuing a relationship with this company.

  7. When all the information is available in public why he need to speak!!

    Few points on Rafale purchase

    1) Technical superiority was already established as it was winner of MMRCA
    2) French companies have supported India in dark days of Blacklist
    3) New deal to buy 36 air crafts are Govt to Govt deal (Like with Russia and US), so no middle man involved.
    4) Regarding Offset clause: Still Dassualt has not finalized (Only it signed JV with Reliance). However, from media reports already it is known that majorly they will support Kaveri engine and share critical technology for Tejas
    5) Main point: Reliance is not building any Rafale (As propagated by some Kids in politics) it will be built in France and supplied to India in fly away condition. Whats the nature of work Reliance and Dassualt JV is going to do only time will tell (As per my knowledge they will mainly support on maintenance).

  8. It is time you speak the truth and clear the air... check the below link - it's your article only. Can you clarify what had changed?


    Will whatever he says make any difference to you and opposition. Your recent articles do not take into cognisance what you wrote about Dassaults preference to tie up with Ambani way back in 2013

  10. @Anonymous 15:12 and @Ashish

    You guys really need to do your research and reading, rather than getting all your information from Tweets.

    Dassault's proposed tie up with Reliance in 2013 was with the Mukesh Ambani group. What they got lumped with in 2016-17 is the Anil Ambani group.

    I do hope you know the difference between the two?

    1. Yes we know the difference but that should be part of corporate governance and SEBI to investigate. Not only that - even the way the telecom assets are getting transferred to Mukesh and defence getting transferred to Anil etc etc should be investigated... Yes it is a bad state of corporate affairs. The two brothers were fighting and now they decided to realign The portfolio and we are getting screwed... trust me I lost a big chunk of money in reliance power deals few years back - and wondered why no one questioned it. But that is besides the point here. The question is why you are blaming Modi for that? Why you are accusing him for this?

  11. @Broadsword
    Can you tell us about the defence industry setup of Mukesh Ambani. Or was it the closeness of Mukesh Ambani with Congress that made him the preferred choice? And isn’t it apparent that Dassault was not keen to partner HAL, an entity that you yourself have chastised so often for incompetence
    Do you change your standards and logic based on political party under consideration?

    1. Valid questions anon..- also add to that - except for Govt labs and cos, no private companies have the knowledge to develop high tech weapons. If we want to nurture private industries given public sector just screwing the armed forces and people, we have to start somewhere. Whether it is RELIANCE or Tatas or L&Ts - some nurturing will always be needed. I am pretty sure everyone are of that opinion to begin with and it is just that no action from I am beyond corrupt but I will screw up my country Anthony frustrated it (of course Anthony must be corrupt too but it is just something that his supporters say)...

  12. Why should PM speak on Rafael ? THE RM and FM have spoken enough and clarified all the points. In fact there ws a news item that the Joint Secretary had put down his dissenting opinion about the pricing and he was over ruled by his superiors. Than what happens to the allegation thatthe PM signed the Rafael dela in utmost secrecy that even his RM and FM and CCS were in the dark about it ? All were aware and it was by concensus that the deal was brokered. PM Modi was a Chaiwala and then a RSS Pracharak. How will he know about the 13 India specific enhancements if the AF was not involved ??? All the lies of the opposition is coming unravelled one after another. So now Pappu Shehzade has stopped talking about this secrecy aspect. The sternest test for this Government and the RM will come when they have to sign the agreements for the second and third lot of Rafaels for the 19 BN tender that they are calling All previous 5 jets are in the fray and now a 6th has joined which is the Su-35 , a variant of which India already has in the Su-30 MKIs.


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