India’s defence minister faced new questions Thursday over a 2016 deal to buy Rafale fighter jets from France, which critics say unfairly profited a key backer of Prime Minister Narendra Modi.
Speaking at a briefing in Paris, Nirmala Sitharaman reiterated the government’s claim that it had no idea the jets’ builder, Dassault Aviation, would team up with Reliance Group, run by the Indian billionaire Anil Ambani. Several reports say Dassault was forced to choose Reliance by Modi, despite its having almost no experience in the aviation sector.
On the eve of Sitharaman’s visit French investigative website Mediapart quoted the notes of a meeting between Dassault management and workers’ representatives which described the choice of Reliance as “imperative and compulsory”.
“We are very clear: With the government of France, we agreed to purchase 36 Rafale aircraft in flyaway condition,” Sitharaman said. “And in an intergovernmental agreement, there are no mentions of any individual firms,” she said. Pressed on whether India would go ahead with the deal amid a chorus of “crony capitalism” claims and complaints filed by Indian anti-corruption groups, the minister adopted a more combative tone.
“It is more for the companies which have chosen A, B or C as their partners to answer questions if there are any,” she said. Dassault on Wednesday contested the Mediapart report, saying it had “freely chosen” to form a joint venture with Reliance. But that stance was contradicted recently by former French president Francois Hollande, under whose watch the Rafale deal was signed.
Hollande said last month that France had “no choice” but to join with Reliance after it was pushed by the Indian government — comments which were seized upon by Indian opposition parties. Under Indian defence procurement rules, foreign companies winning contracts must “offset” or reinvest half the total value — in this case around eight billion euros — in joint ventures or purchases with Indian firms.
Dassault Aviation’s CEO Eric Trappier told AFP that a joint factory with Reliance in the central Indian city of Nagpur represented “around 10 percent” of the roughly four billion euros of offset investments. “We’re in talks with about 100 Indian firms, including around 30 with which we’ve already confirmed partnerships,” he said. Dassault negotiated for years with India’s state-owned Hindustan Aeronautics Limited (HAL) for the order, with the jets being jointly built in India. But those talks were cancelled after Modi took office, when he decided to purchase the jets directly from France.
