India opted to buy 36 of the Rafale French-made fighter aircraft. The deal is now mired in a massive controversy. Photo: Wikimedia Commons / Arnaud Gaillard

A new revelation by former French president Francois Hollande on the India-France deal to buy 36 Rafale fighter jets has sparked off a fresh round of allegations against Prime Minister Narendra Modi’s government.

The deal to buy the jets from the French aviation major Dassault Aviation has led to a massive controversy that has mired the Modi government in allegations of kickbacks and crony capitalism.

The agreement was suddenly announced by Modi on an official visit to France in April 2015. However, a clause in defense deals mandated by India, states that at least 50% of the contract value must be given to Indian companies as “offsets”.

Curiously, an earlier deal to buy 126 fighter jets from Dassault was cancelled by the Modi government in favor of the new deal.

The first deal involved public sector firm Hindustan Aeronautics Limited (HAL), which is overseen by the Ministry of Defense, while the second deal cuts HAL out and a private firm, belonging to an industrial house with major debts, was brought in as an offset partner.

The Modi government had defended the move to bring in a private player stating that it was a decision of Dassault Aviation and the French. But Hollande has gone on record to state that it was the Indian government who brought in the private player.

Allegations

While speaking to the online media publication mediapart.fr, Hollande said “C’est le gouvernement indien qui a proposé ce groupe de service, et Dassault qui a négocié avec Ambani. Nous n’avons pas eu le choix, nous avons pris l’interlocuteur qui nous a été donné” (The Indian government proposed this service group, and Dassault negotiated with [Anil] Ambani [the head of a major group of companies]. We did not have the choice, we took the interlocutor who was given to us).

In a fresh statement on Saturday, Hollande reaffirmed his earlier statement and added that he didn’t know what happened with Dassault when the deals for offsets were finalised in 2016.

Hollande’s first comments led to immediate clarifications from the french government and Dassault Aviation. Curiously, none of them directly addressed the key revelations made by Hollande.

On April 8, 2015, the then Foreign Secretary Subrahmanyam Jaishankar told the media before embarking on a multi-nation tour that “in terms of Rafale, my understanding is that there are discussions underway between the French company, our Ministry of Defense, and HAL. These are ongoing discussions. These are very technical, detailed discussions. We do not mix up leadership level visits with deep details of ongoing defense contracts.”

A few days later Modi announced a fresh deal with France, indicating that the foreign secretary was not in the loop. In his briefing Jaishankar assumed that the earlier deal to buy the 126 fighter jets was still under consideration. However, subsequent facts indicate otherwise.

The reason for cancelling the first jet deal has never been fully clarified. In 2015, the then defense minister Manohar Parrikar cited escalating cost as a major reason to cancel the deal. Parrikar cited a figure of Rs 900 billion to the official government channel Doordarshan on April 13, 2015. But in a subsequent interview a month later, to news agency Press Trust of India, he raised the price to Rs 1.3 trillion. No explanations on this revised estimate has ever been sought or offered by the Modi government.

Currently, the reason for cancelling the earlier deal due to high costs has moved to an argument that HAL was not good enough to go ahead with the deal. Ironically, this argument came from no less than the current defense minister, Nirmala Sitharaman, in an interaction with the editorial staff of the news agency Press Trust of India. HAL, as a public sector undertaking, comes under Sitharaman’s ministry.

Depleted Indian Air Force

For nearly two decades the Indian Air Force has been desperate to modernize its depleting fighter jet squadrons. Officially, it has 45 fighter jets squadrons. In reality, with most of its ageing Soviet-era fighter jets being mothballed, it is down to less than 30 squadrons. Even the bulk of the remaining squadrons have decades-old aircraft such as the MiG-21, the Mirage-2000, MiG-29 and Jaguars.

Most of these aircraft have already completed their original life-cycle and need to be replaced. Ideally, defense acquisitions in India are driven by long-term perspective planning by the respective services. For decades, the air force has cited the need for Medium Multi Role Combat Aircraft (MMRCA), which can perform a multitude of roles in different theatres of war.

After nearly a decade of issuing requests for bids to test various aircraft ranging from the Swedish Gripen to the American F-16 and F/A-18, the Indians settled on the Rafale. They cited a requirement for 126 aircraft, which was negotiated by the previous Congress-led government. However, in 2014 they lost the general election and Modi took charge with India’s first full majority government in 30 years.  But in April, it mysteriously junked the ongoing 126-aircraft negotiations and announced a 36-aircraft deal for a considerably higher price.

This sparked off a major controversy reminiscent of the Bofors artillery gun controversy that had haunted the Rajiv Gandhi-led Congress government from 1984 to 1989. The Bofors case came to represent the corruption-infested defense deals in India for decades. At that time Swedish radio revealed key details that led to the explosive controversy. This time, a former French president’s interview has opened a can of worms for the Modi government months ahead of a general election.

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