Dassault Delivers

Unfazed by the controversy caused by Dassault document leaks last week, the company’s CEO announced that the company will start delivering the 36 fighter jets from 2019. In 2007, the Indian Air Force advanced a proposal to buy 126 fighter aircraft. The IAF has a strength of 34 squadrons in total but hoped to acquire…

Unfazed by the controversy caused by Dassault document leaks last week, the company’s CEO announced that the company will start delivering the 36 fighter jets from 2019.

Background

In 2007, the Indian Air Force advanced a proposal to buy 126 fighter aircraft. The IAF has a strength of 34 squadrons in total but hoped to acquire a total of 42 combat squadrons by 2032 in order to meet the contingencies of a two-front war.

In April 2015, the Indian government announced the deal to buy 36 Rafale fighter jets from France, about three years after the previous government decided to purchase 126 Rafale fighter jets, 108 of which were to be made in India by HAL. The Rafale fighter is a twin-engine Medium Multi-Role Combat Aircraft manufactured by French aerospace company Dassault Aviation. The deal has stirred controversy across the country; the opposition and past petitioners to the Supreme Court have claimed that the government bought the jets at an inflated price and benefited Reliance Defence at the expense of state-owned Hindustan Aeronautics Limited (HAL).

Former French president Francois Hollande fueled further rumours of underhand dealing in a series of interviews, claiming that the French government was given no choice but to choose Reliance as the offset partner in the deal; these statements seemed to be supported by leaked documents from Dassault that were unearthed last week.

Analysis

While details emerged about presentation made by Dassault’s chief operative officer Loik Segalen to the company’s staff representatives in Nagpur in May 2017 where he describes the Reliance partnership as “imperative and mandatory” to get the Rafale export contract to India, India’s Defence Minister Nirmala Sitharaman flew to Paris to complete negotiations on the Dassault deal. Sources say she held wide-ranging talks with her French counterpart Florence Parly on ways to deepen strategic cooperation and also deliberate on major regional and global issues of mutual interests. Speculation was rife that the government would drop Reliance Group as the offsets partner in the deal. Many seemed to believe that dropping Reliance would be an admission of questionable dealings. While accusing the Prime Minister of corruption, the leader of the opposition Rahul Gandhi demanded a JPC (Joint Parliamentary Committee) probe into the controversy that has dominated national headlines for over a month. He insisted that the state-owned aviation company HAL (Hindustan Aeronautics Limited) was a “strategic asset” for the country and should have been chosen as the offsets partner. He addressed present and former employees of the defence PSU, and said he was interacting with the employees to understand how to make “this strategic asset” (HAL) more effective “so that when we come to power, we will do it more aggressively.”

As these events unfolded, French defence manufacturing giant Dassault Aviation has said that its joint venture with Anil Ambani’s Reliance Defence will help it achieve the 10 per cent of its offset obligations in India.

Dassault has said that besides Reliance Defence, it is also in touch with nearly 100 other Indian firms which are its offset partners. It said that negotiations with nearly 30 of them have been finalised. In an interview to news agency AFP on Thursday, Chief Executive Officer (CEO) of Dassault Aviation Eric Trappier said the decision to choose Reliance Defence as an offset partner was taken by Dassault Aviation.

Earlier today, Trappier said that Dassault Aviation will deliver its Rafale fighter jets to India from 2019 and may see new orders in the coming months. He was speaking to Reuters ahead of the world’s largest business jet show in Orlando.

In order to resolve the dispute surrounding the deal, the Supreme Court has asked the central government to submit details of the procedure followed in the procurement of the Rafale jets in a sealed cover by 29 October.

Assessment

Our assessment is that it is a good sign that the controversy surrounding the deal has not significantly delayed delivery of the Rafale jets. We believe that in such issues, the nation’s security interests are paramount. Part of national security is maintaining peace and transparency within a nation; for this reason, we also hope that the dissent caused by the deal is expediently resolved.