Defence Minister Nirmala Sitharaman in her office. (Photo: Neeraj Priyadarshi)
A day after former French president Francois Hollande stated that Anil Ambani’s Reliance Defence was chosen as the offset partner by Dassault because the Indian government had “proposed” its name, the Ministry of Defence on Saturday said it had “no role” in the selection.
“The Government has stated earlier and again reiterates that it had no role in the selection of Reliance Defence as the Offset partner,” the MoD said in a press release.
It said “unnecessary controversies” are being sought to be created following media reports regarding a statement purportedly made by Hollande concerning the selection of Reliance Defence as the offset partner by Dassault Aviation, the manufacturers of Rafale aircraft.
The Ministry’s response comes a day after a French media report quoted ex-French president Hollande as saying that the Indian government had “proposed” Anil Ambani’s Reliance Defence as the partner for Dassault Aviation in the Rafale jet fighter deal and France did not have a choice. “We didn’t have a say in that. It was the Indian government that proposed this service group (Reliance), and Dassault who negotiated with Ambani. We didn’t have a choice, we took the interlocutor who was given to us,” Hollande was quoted by French news website Mediapart.fr on the offset contract.
The former French President’s remarks contradicted the Indian government’s claim that the deal between Dassault and Reliance was a commercial pact between two private parties and the government had nothing to do with it.
Stating that Hollande’s reported statement “needs to be seen in its full context”, the Ministry said: “The Offset Policy was formally announced for the first time in 2005 and has been revised several times. To leverage its huge arm-imports in order to develop a strong indigenous industry, a flow-back arrangement is made in the defence contracts, which is widely known as offsets, and constitutes a certain percentage of the contract value.”
“The key objectives of the Defence Offset Policy is to leverage the capital acquisitions to develop Indian defence industry by fostering development of internationally competitive enterprises; augmenting capacity for research and development in defence sector and to encourage development of synergistic sector like civil aerospace and internal security. The offset can be discharged by many means such as direct purchase of eligible products/services, FDI in joint ventures and investment towards equipment and transfer of technology. As per Defence Offset Guidelines, the foreign Original Equipment Manufacturer (OEM) is free to select any Indian company as its offset partner,” it said.
The Ministry also said: “media reports of February, 2012 suggest that Dassault Aviation, within two weeks of being declared the lowest bidder for procurement of 126 aircraft by the previous Government, had entered into a pact for partnership with Reliance Industries in Defence sector.”
Following Hollande’s remark, the Congress stepped up its attack on the BJP-ruled Central government. Calling Prime Minister Narendra Modi as “corrupt”, Congress president Rahul Gandhi said he should clarify his stance on the controversy raging over the purchase of 36 French-manufactured aircraft.
“We are absolutely convinced that the Prime Minister of India is corrupt. This question is now clearly settled in the mind of the Indian people that ‘desh ka chowkidaar’ chor hai,” Gandhi said while addressing a presser in New Delhi.
The deal for 36 Rafale aircraft in a government-to-government agreement was announced by Prime Minister Modi on April 10, 2015 during his visit to Paris, which led to the cancellation of the 126 aircraft deal being negotiated by the previous government. The deal was eventually signed on September 23, 2016 in Delhi between then Defence Minister Manohar Parrikar and his French counterpart.
Opposition parties, including the Congress, have alleged that undue favours had been granted to Ambani’s firm in this deal, a company without any defence manufacturing experience.