Rafale Deal Case - A Controversy

Rafale Deal Case - A Controversy

What is the Rafale deal controversy?

In April 2015, Government of India announced that the country will purchase 36 aircraft from the French aviation company Dassault in ready-to-fly condition. This decision was taken in order to improve the strategic capabilities of our Air Force. The decision was formalized in an inter-government agreement between India and France in January 2016 with a total cost of Rs. 58,000 crores or 7.8 billion Euros. In doing so, the NDA government took a 180-degree turn from it’s earlier decision toscrap the previous deal on the matter.

The previous UPA government, after a ten-year-long negotiation process agreed on acquiring 126 aircraft, with 18 aircraft in ready-to-fly condition and the remaining 108 aircraft to be assembled in India by the public sector company Hindustan Aeronautics Limited (HAL). The Modi government after coming to power canceled the deal saying that the twin power engine aircraft are too expensive.  However, after his visit to France in April 2015, the deal was reinstated on new terms. As per the new agreement, India would now buy 36 aircraft in a ready-to-fly condition with specific add-ons suited for Indian conditions. This would be undertaken by Dassault in collaboration with DRDO and HAL.

In November 2016, the opposition decried the deal as a scam on two terms. One of the major bone of contention was the inflated cost of the planes and changed terms of purchase. Congress claimed that the cost of each plane was three times more than that in the previous arrangement. Further, the selection of the Anil Ambani led Reliance Defence Limited as Dassault’s Indian offset partner also raised suspicion.

Both of these allegations were vehemently opposed by the government. Defence minister Nirmala Sitharaman in her statement said that the increased cost was due to better technological package and superior logistical support absent in the previous deal. Further, the clauses of the deal had vested the power of selecting an Indian partner with Dassault. The government had no role in the selection of Reliance Defence Ltd. as the French firm’s offset partner.

Rafale Deal Timeline:

Dec 30, 2002: Defence Procurement Procedures (DPP) adopted to streamline procurement procedures.

Aug 28, 2007: Ministry of Defence issues Request for Proposal for procurement of 126 MMRCA (medium multi-role combat aircraft) fighters.

September 4, 2008: Mukesh Ambani-led Reliance group incorporates Reliance Aerospace Technologies Ltd (RATL).

May 2011: Air Force shortlists Rafale and Eurofighter jets.

January 30, 2012: Dassault Aviation’s Rafale aircraft comes up with the lowest bid.

2014

March 13: Work Share agreement signed between HAL and Dassault Aviation under which they were responsible for 70 per cent and 30 per cent of the work, respectively, for 108 aircraft.

August 8: Then defence minister Arun Jaitley tells Parliament that 18 direct ‘fly-away’ aircraft expected to be delivered in 3-4 years from signing of the contract. Remaining 108 aircraft to be delivered in the next seven years.

2015

April 8: The then foreign secretary says detailed discussions underway between Dassault, MoD and HAL.

April 10: New deal for acquisition of 36 direct ‘fly-away’ aircraft from France announced.

2016

January 26: India and France sign MoU for 36 Rafale aircraft.

September 23: Inter-governmental agreement signed.

November 18: Government states in Parliament that the cost of each Rafale aircraft to be approximately Rs 670 crore and that all aircraft will be delivered by April 2022.

December 31: Dassault Aviation’s Annual Report reveals the actual price paid for the 36 aircrafts at about Rs 60,000 crore, more than double the government’s stated price in Parliament.

2018

March 13: PIL in SC seeks independent probe into Centre’s decision to procure 36 Rafale fighter jets from France and disclosure of the cost involved in the deal before Parliament.

September 5: SC agrees to hear PIL seeking stay on Rafale fighter jet deal.

September 18: SC adjourns hearing on PIL seeking stay on Rafale fighter jet deal to October 10.

October 8: SC agrees to hear on October 10 fresh PIL seeking direction to Centre to file in “sealed cover” the details of the agreement for buying 36 Rafale fighter Jets.

October 10: SC asks Centre to provide details of decision making process in the Rafale fighter jet deal in a sealed cover.

October 24: Former Union ministers Yashwant Sinha and Arun Shourie and activist-lawyer Prashant Bhushan moves SC, seeking registration of FIR into Rafale fighter jet deal.

October 31: SC asks Centre to place before it in a sealed cover within 10 days the pricing details of 36 Rafale fighter jets.

November 12: Centre places price details of 36 Rafale fighter jets in a sealed cover before SC. It also gives details of steps that led to finalisation of the Rafale deal.

November 14: SC reserves order on pleas seeking court-monitored probe in Rafale deal.

December 14: SC says there is no occasion to doubt the decision-making process of the Modi government and dismisses all the petitions seeking direction to the CBI to register an FIR for alleged irregularities in the jet deal.

The present situation     

Presently, the Rafale deal is a raging controversy. The Government has refused to divulge the details of the prices of the aircraft citing national security issues. Therefore, all the information in the public domain is from ‘unofficial’ sources. Moreover, former French President Hollande in his statement had said that the ‘Government of India had pushed for Reliance Defence Ltd. as the offset partner for Dassault’. Citing discrepancies in the deal, two former BJP legislators Arun Shourie and Yashwant Sinha, and prominent PIL activist Prashant Bhushan filed a review petition in the SC. They urged the court to order an independent probe into the Rafale deal. However, a bench headed by Chief Justice Ranjan Gogoi rejected the review petition. The court has in its statement said that there are no substantial reasons for the court to intervene in this matter. The Court has based its decision on sealed envelopes submitted by the government which are not in the public domain. The court’s decision is also being questioned. It incorrectly assumes that the CAG report on the matter has been reviewed by the PAC, which was an important factor in the decision. The leader of the opposition and PAC chairman, Mallikarjun Kharge has denied receiving any such report from the CAG which exonerates the ruling regime. The opposition is now adamant on setting up a Joint Parliamentary Committee for investigating this matter. Moreover, the government has most requested the Hon’ble Supreme Court to change paragraphs in its decision for rectifying some ‘grammatical’ errors. These paragraphs are also incidentally related to the review of the CAG report by the PAC.

Conclusion

An impartial investigation into the matter will only tell whether the deal is fair or crooked. But, the conduct of the government during this entire controversy has certainly created room for suspicion. Therefore, it becomes imperative that a committee be set up at the earliest for investigating this matter and uncovering the facts of the deal.