India’s much-delayed acquisition of Dassault Rafale combat aircraft from France has erupted into a major controversy this week, with the country’s defense minister, Nirmala Sitharaman, refusing to reveal the total cost of the deal.
In a written response to Parliament, Sitharaman claimed that revealing the cost was forbidden by a bilateral agreement between India and France that predates Prime Minister Narendra Modi’s government.
The Rafale deal comes at a time when the Indian Air Force (IAF) is desperately short of fighter squadrons. The sanctioned strength is 42 squadrons, but the force is currently down to less than 31. Most of the squadrons have decades-old MiG-21s, which have outlived their intended lifespan. The IAF was originally mandated by the then-Indian National Congress government to buy 126 Medium Multi Role Aircraft to plug this gap, and zeroed in on the Rafale model after extensive tests in 2008.
Sitharaman’s refusal to state the details of the deal runs contrary to her earlier assertions (see video) that she would do so. In a press conference held last year, she was specific about her commitment to transparency in the deal. “I am not running away from giving you specific numbers. We will give (it to) you. I don’t mind about the cost and the amount which is being paid, agreed to be paid, because those are public money.”
On February 6, Sitharaman reneged on her promise and cited an earlier bilateral agreement between India and France for not revealing the figures. Such agreements do have secrecy clauses regarding materials and capabilities, but this is the first time Parliament has been denied knowledge of acquisition costs.
The cost of the Rafale deal has always been somewhat shrouded in mystery.
Sitharaman’s predecessor, Manohar Parrikar, came up with different sums on different occasions. On April 13, 2015 Parrikar stated in an interview that the cost for 126 Rafales was Rs900 billion (US$14 billion). But a few weeks later, on May 31, he claimed that the price was Rs1.26 trillion. He never explained how he arrived at either estimate.
Just three days before Parrikar’s later claim, Prime Minister Narendra Modi surprised everyone, during an official visit to France, by declaring a fresh deal to buy 36 Rafales, for two IAF squadrons, in “fly away” condition. This was presented as a replacement for the earlier deal. The price was never disclosed, but it has been estimated at upwards of Rs600 billion.
Then, in November 2016, junior defense minister Subhash Bhamre revealed in a written reply to Parliament that the Indian government was paying Rs6.7 billion per aircraft to the French under an Inter-Governmental Agreement (IGA) signed on September 23, 2016.
The INC, in opposition, has been quick to take the government on over its lack of transparency in the deal. The party’s president, Rahul Gandhi, has mocked the Modi government on Twitter, and key leaders have hammered it for its lack of consistency.
Dubious transparency claims
“It is strange that the government is resorting to non-disclosure and attempting to hide behind a June 2008 agreement signed between India and France,” former government minister and senior INC leader Manish Tewari told Asia Times.
A practicing lawyer, Tewari said the deal was “equivalent to an Intellectual Property Right agreement in the commercial space. The price of the deal has already been disclosed by the Minister of State for Defense in Parliament. The (Modi) government needs to explain why, if this confidentiality applies, this was not the case in November 2016.”
Tewari added: “This acquisition is appropriated by the Ministry of Defense in its budget for capital acquisitions, which is passed by Parliament. Any such deal has to be audited both by defense accounts and the Comptroller and Auditor General (CAG) of India. Therefore, it is very curious of the government to argue that it will not divulge the price of a capital acquisition to Parliament.”
Two former defense secretaries spoken to by Asia Times agreed with Tewari’s assessment. “It is difficult to understand how capital acquisition prices can’t be disclosed to Parliament,” said one former secretary, on condition of anonymity. “We came close to closing the deal in 2009, but we did not agree on the price. However, any deal would have to go to the CAG for an audit. And the audit report will go to the Public Accounts Committee (PAC) of Parliament. So these details will be available anyway, so the government’s claim is inexplicable.”
The other defense secretary was equally perplexed. “The fact that the government did disclose the figure earlier and is refusing to do so now is an eloquent comment on how incompetent it is,” the former secretary said.
The government issued a lengthy press release on February 7, trying to make a case for not disclosing the price. It pointed out that the previous INC-led government had also declined to share details of defense deals on occasion. However, it did not clarify the numerous contradictions between its earlier and current positions.
For a government that came to power riding on claims that it would clean up the system, its unprecedented levels of secrecy have undermined its position in the last four years. In the run-up to general elections in 2019, its record on transparency may well become an embarrassment for Modi’s Bharatiya Janata Party (BJP).