JAIPUR – Ghosts of a five-year-old scandal over the purchase of French-made Rafale jet fighters have returned to haunt Indian Prime Minister Narendra Modi’s government.
French authorities have made waves in New Delhi by initiating a probe into alleged corruption and favoritism in the 7.8 billion euro (US$9.2 billion) sale of 36 Dassault Aviation-built fighters in 2016.
Modi has persistently insisted that the deal is clean, but this stance is being questioned with new vigor by opposition parties. The opposition Indian National Congress party has been the most vocal so far in demanding a Joint Parliamentary Committee investigation into the deal.
Congress has questioned Modi about the deal since it was first finalized, but to date, his government has been able to sidetrack the issue. Now, with French authorities appointing an investigative judge – as reported on French investigative website Mediapart – there is new heavy pressure on Modi and his team to come clean.
Mediapart has carried a series of reports claiming financial wrongdoing in the deal, prompting French authorities to order the inquiry.
“The criminal investigation opened on June 14th and led by an independent magistrate, an investigating judge, will, among other elements, examine questions surrounding the actions of former French president Francois Hollande, who was in office when the Rafale deal was inked, and current French President Emmanuel Macron, who was at the time Hollande’s economy and finance minister, as well as the then defense minister, now Foreign Affairs Minister, Jean-Yves Le Drian,” Mediapart reported.
Mediapart says the probe will also focus on the role of wealthy Indian businessman Anil Ambani, chairman and owner of conglomerate Reliance Group and known to be personally close to Modi. Ambani, the Mediapart report says, is allegedly at the heart of the corruption allegations surrounding the jets deal.
Mediapart cited a partnership between Dassault Aviation and Reliance, which in 2017 created a joint venture company to build an industrial plant near the central Indian city of Nagpur.
Confidential documents reportedly obtained by Mediapart show that Reliance was given a majority 51% stake in the joint venture in return for its political influence rather than funds or apparent expertise in industrial estate building.
Corruption complaints about the deal were heard by India’s Supreme Court in December 2018, including allegations India overpaid for the jets and that the deal encouraged “crony capitalism.” However, the court then ruled there was nothing wrong with the deal.
Mediapart also quoted Dassault Aviation as denying any wrongdoing, with the fir saying it adhered strictly to the OECD Anti-Bribery Convention and other relevant French laws.
The French probe could not have come at a better time for India’s opposition, giving it new ammunition against the government at a time its popularity is sagging due to its alleged mishandling of a Covid second wave and a badly flagging economy.
India’s gross domestic product (GDP) contracted 7.3% in 2020-2021, representing a record collapse, while unemployment is high and inflation is rising.
Voters will have the opportunity to express their democratic discontent with Modi’s ruling Bharatiya Janata Party (BJP) with at least seven states set to hold assembly polls over the next 10 months. The biggest of these is Uttar Pradesh, which will mark a key test of Modi’s popularity and potentially serve as a bellwether for 2024 parliamentary elections.
The opposition is thus dropping political bombs on the Rafale jets issue, though its not immediately clear how the issue might resonate with pandemic-hit voters at local state elections.
National media, apart from a few lesser-read news portals, publications and television channels, have dedicated little, if any, coverage of the issue.
Suspect arms deals have made political ripples in the past. In the 1980s, a similar scandal rocked the Rajiv Gandhi-led Congress government when India signed a $1.4 billion deal with Swedish arms maker AB Bofors for 400 155mm howitzer guns for the army.
The kickback allegations amplified by national and regional media reporting badly damaged the Gandhi administration’s reputation and his government lost the 1989 general Lok Sabha elections as a result.
Congress clearly senses a political opportunity in the scandal and is ramping up the issue on social media. Independent analysts and observers have chimed in, saying it is unclear why the Indian government will not order an inquiry when France has already done so.
A K Antony, a Congress leader and former defense minister, said: “One party to the agreement, ie, the French Government, has proceeded to order an investigation through a judge.
“The only way forward is to accept accountability and order a free and fair JPC probe into the entire set of facts, evidence and allegations of corruption in the Rafale deal.”
Congress spokesperson Pawan Khera said: “After the decision by France to investigate corruption,” “influence peddling,” “money laundering,” “favoritism,” “there is one question every responsible Indian, every concerned citizen asks: Why is the government of India still silent?”
“Now, given that the French Public Prosecution Services has initiated an investigation into corruption allegations against the previous and probably the current president of France, who was one of the parties to this deal, why is no inquiry being ordered on the role, on the undeniable role of the key functionaries of the Government of India, which is the other side of this [mulit-billion dollar] inter-governmental agreement?”
The BJP, for its part, has played down the issue. National spokesperson Sambit Patra said: “An NGO in France has complained about Rafale and a magistrate has been appointed there for that.
“But the way Rahul Gandhi and Congress are politicizing the whole episode, it is sad. The Congress has become synonymous with spreading lies.”
Patra said the Supreme Court, the Comptroller and Auditor General have all issued reports on the Rafale deal in the public domain and have universally found no wrongdoing.
“The misconceptions that [Congress politician] Rahul Gandhi tried to spread before the 2019 Lok Sabha elections also did not work for him and we got a huge victory in the elections and our government was formed,” he said.
Indeed, Congress made the Modi government’s alleged corruption in the Rafale deal one of its main planks while campaigning for the 2019 Lok Sabha polls it resoundingly lost.
But with Modi’s waning popularity, a bungled Covid-19 response and, most importantly, the new French inquiry, things arguably don’t look the same as in 2019.