Rafale Deal: Chose to partner with Reliance group, says Dassault Aviation

New Delhi: French aerospace major Dassault Aviation has said it had made the decision to partner with Reliance Defence Ltd for the Rafale deal, comments which came after former French President Francois Hollande's reported claim that the selection of the Indian company was done at the behest of New Delhi.

"This offsets contract is delivered in compliance with the Defence Procurement Procedure (DPP) 2016 regulations. In this framework, and in accordance with the policy of Make in India, Dassault Aviation has decided to make a partnership with India's Reliance Group. This is Dassault Aviation's choice," the company said. 

The statement by Dassault Aviation came following a French media report which quoted Hollande as saying that the Indian government proposed Reliance Defence as the partner for the French aerospace giant in the Rs 58,000 crore Rafale deal and France did not have a choice. Hollande's comments to 'Mediapart', a French language publication, triggered sharp reactions from the opposition parties which have been accusing the government of massive irregularities in the deal and benefiting Reliance Defence Ltd (RDL) despite not having any experience in the aerospace sector. 

The report quoted Hollande as saying, "It was the Indian government that proposed this service group, and Dassault who negotiated with Ambani. We had no choice, we took the interlocutor who was given to us." 

Read: No choice given, India suggested Reliance for Rafale deal: Hollande

The sensational comments quoted to Hollande gave a new twist to the controversy as the Indian government has been maintaining it was not officially aware of whom the Dassault Aviation has selected as its Indian partner to fulfil offset obligations of the deal. Prime Minister Narendra Modi had announced the procurement of a batch of 36 Rafale jets after holding talks with the then French President Hollande on April 10, 2015 in Paris. 

On Friday, the French government said it was in no manner involved in the choice of Indian industrial partners. 

Also Read: Not involved in choosing Indian partners in Rafale deal, clarifies France

In its statement, Dassault Aviation said the contract for supply of 36 Rafale jets is a government-to-government agreement, adding "It provides for a separate contract in which Dassault Aviation commits to make compensation investments (offsets) in India worth 50 per cent of the value of the purchase." 

The company also said its partnership with Reliance has led to the creation of the Dassault Reliance Aerospace Ltd (DRAL) joint-venture in February 2017. 

"Dassault Aviation and Reliance have built a plant in Nagpur for manufacturing parts for Falcon and Rafale aircraft. The Nagpur site was chosen because of the availability of land with direct access to an airport runway, an essential condition of aeronautic activities," it said. 

Under India's offset policy, foreign defence entities are mandated to spend at least 30 per cent of the total contract value in India through procurement of components or setting up of research and development facilities. 

"Other partnerships have been signed with other companies such as BTSL, DEFSYS, Kinetic, Mahindra, Maini, SAMTEL,… Other negotiations are ongoing with a hundred-odd other potential partners. Dassault Aviation is very proud that the Indian authorities have selected the Rafale fighter," said the company. 

Prime Minister Narendra Modi had announced the procurement of a batch of 36 Rafale jets after holding talks with then French President Hollande on April 10, 2015 in Paris. The final deal was sealed on September 23, 2016. The Congress has been accusing massive irregularities in the deal, alleging that the government was procuring each aircraft at a cost of over Rs 1,670 crore as against Rs 526 crore finalised by the UPA government when it was negotiating procurement of 126 Rafale jets.

The Congress has also alleged the government was benefitting the Reliance Defence through the deal as the company has set up a joint venture with Dassault Aviation to execute the offset obligation for the deal.

The opposition parties have also alleged Reliance Defence was formed just 12 days before the announcement of the Rafale deal by the prime minister on 10 April 2015. Reliance group has rejected the charges.

Also Read: 'Shame Modiji, you betrayed India's soul': Rahul attacks PM on Rafale deal

The Congress has also been demanding answers from the government on why state-run aerospace major HAL was not involved in the deal as finalised during the UPA.