Rafale Deal Row

Why in news?

Former French president recently said that the Indian government had “proposed” Anil Ambani’s Reliance Defence as the offset partner for the Rafale aircraft deal.

What is the current controversy?

• Under defence offset, a foreign supplier of equipment agrees to manufacture a given percent of its product (in terms of value) in the buying country.
• Dassault Aviation (French manufacturer) has 'chosen' Reliance Defence Ltd (RDL) as the Indian partner to fulfil offset obligations of the Rafale deal.
• Both companies have already announced setting up of a joint venture to manufacture aerospace components.
• Former French President François Hollande has now stated that it was the Indian government that suggested the RDL.
• The charge has raised concerns of crony capitalism in the process of the deal.
• It seems to be reinforcing the allegation that the deal was structured to favour an industrialist.
• The opposition parties have accused the NDA government of favouring the RDL over the state-run Hindustan Aeronautics Ltd.

What are the clarifications made?

• Clarificatory statements were soon issued by the Centre, the French Foreign Ministry and Dassault.
• The Indian government reiterated that governments have no role in offset contracts, which are purely commercial.
• The choice of offset partners is entirely that of the manufacturer (Dassault Aviation).
• The French government also said much the same as what India said.
• Dassault’s statement reaffirmed that it had 'chosen' to tie up with Reliance Defence.
• But these clarifications did little to clearly address what Mr. Hollande had said.
• The question that if the Centre 'suggested' a partnership with Reliance Defence remains unanswered.

What is the way forward?

• Defence modernisation would become the real victim if the political war over Rafale continues.
• So greater transparency is the only way to clear all the controversy around the deal.
• Private briefings to Opposition leaders and the disclosure of all information are good starting points.
• This should however not jeopardise national security or impact the aircrafts’ operational capability.
• Besides, the decision to reject the formation of a Joint Parliamentary Committee to examine the deal should be reconsidered.

Source: The Hindu