News By/Courtesy: Sanveer Singh | 05 Apr 2020 22:23pm IST


  • The Rafale deal 2012
  • The new Rafale deal 2015
  • The investment obligation due to offset clause

The Rafale deal 2012

28 August 2007, defense ministry accepted the proposal for 126 MMRCA (Medium Multi-Role Combat Aircraft) fighter jets.

Bids were invited and In May 2011, 2 aircraft were shortlisted-Eurofighter and Rafale aircraft.

Negotiations started in January 2012 with Dassault Aviation for Rafale aircraft, because their bid amount was the least of all.

The deal was that the company will transfer 18 aircraft off the shelf, i.e. manufactured by them in France and for the remaining 108 aircraft they will transfer their technology to HAL (Hindustan Aeronautics Limited) and then HAL will manufacture them in India.

In March 2014 Dassault Aviation and HAL signed a ‘Workshare agreement’, in which it was mentioned that for the manufacturing of 108 aircraft in India, 70% of the work will be done by HAL and 30% will be done by Dassault aviation itself.

In March 2015 the Dassault chairman said that 95% of the paperwork is complete within HAL and them and the deal will be signed soon.

The new Rafale deal 2015

On 10 April 2015 India and France simultaneously issued a statement regarding a new rafale deal for off the shell purchase of 36 aircraft.

The opposition questioned that what about the old deal and why don’t defense ministry asked before finalizing the deal?

On 25th and 28th March 2015, two new companies were incorporated namely Reliance defense limited and Adani defense systems and technologies limited.

It was mentioned in the new deal was that the aircraft will be of similar configuration as of the old deal.

There was an offset clause in the new deal, which says that Dassault aviation shall have to invest 50% of the deal amount in India.

The deal was finalized for 59,000 crores. Thus, Dassault was to invest 29,500 crores in India.

On 3rd October 2016, Anil Ambani’s Reliance Group and Dassault started a joint venture named Dassault Reliance Aerospace Ltd. As per a report issued by the Hindu in June 2017, Dassault is planning to invest 21,000 in the said joint venture, to fulfill the conditions of the offset clause. It became a controversy that BJP is doing favoritism in this investment. This controversy increased when the ex-president of France (who signed the deal) said that Anil Ambani is the choice of the Modi government as an offset partner. But in response to this Dassault said that they freely chose Reliance defense ltd for the investment.

In October 2018 The then defense minister Nirmala Sitharaman said that we have not favored Reliance against Dassault. Dassault CEO confirmed this and said only 10% of the offset money will be invested in Reliance and the remaining money will be invested in other more than 100 companies. This will be confirmed when in the future, Dassault will start fulfilling offset obligations.

This was the first part, I will discuss further in part 2 of this article.

Do share your views in the comments section below.


Section Editor: Pushpit Singh | 20 Apr 2020 14:04pm IST

Tags : Rafale deal, Defense, Modi, BJP, France, Reliance, Ambani, Adani

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