Rafale deal row: Dassault CEO clears air, says offset with Reliance only 10 per cent of ‘obligation’, in talks with 100 other Indian firms

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Prime Minister Narendra Modi had introduced the procurement of a batch of 36 Rafale jets after talks with the then French President Francois Hollande on April 10, 2015 in Paris. 

Dassault Aviation CEO Eric Trappier has cleared the air on the continued Rafale jet deal controversy. In his interview to AFP, Trappier stated that Dassault Aviation’s three way partnership with Reliance represents round 10 per cent of the offset investments beneath the Rafale jet deal.


“We’re in talks with about 100 Indian firms, including around 30 with which we’ve already confirmed partnerships”, Trappier stated.


“Signing an offset contract is a requirement of Indian regulation (Defence Procurement Procedure). The implementation of offsets is an obligation and, beneath the Indian regulation, the selection of the companions belongs to us, Trappier was quoted as saying.


“In full compliance with this regulation, Dassault Aviation subsequently determined to arrange the DRAL three way partnership with Reliance and construct a plant in Nagpur, which ought to allow us to satisfy about 10% of these offset obligations. We are in negotiations with a few hundred Indian firms and partnerships have already been concluded with about thirty of them,” he was quoted as saying.


He stated what known as “offset” in English is often translated into French as “compensation” or “contrepartie”. With regard to the employees and trades unions organisations, Dassault Aviation makes use of the time period “obligation contractuelle d’offset” or “obligation contractuelle de compensation”, he stated.


Dassault negotiated for years with Hindustan Aeronautics Limited (HAL) for the order, with the jets being collectively constructed in India.


But these talks had been cancelled after Prime Minister Narendra Modi took workplace, when he determined to buy the jets immediately from France. 


Asked why Dassault selected Reliance over HAL as its companion, Trappier stated Dassault Aviation determined to determine a long-term presence in India by DRAL, a joint enterprise in which governance is offered by an Indian Chief Executive Officer and a French Chief Operating Officer. 


“Dassault Aviation subsequently workouts technical and industrial management over the operations, making use of its requirements and its flexibility. This JV will produce elements for the Falcon 2000 and Rafale. The selection of the Nagpur website, in central India, was dictated by the provision of land with direct entry to an airport runway, he was quoted as saying. Dassault on Wednesday stated it had “freely chosen” to type a three way partnership with Reliance. But that stance was contradicted not too long ago by former French president Francois Hollande, beneath whose watch the Rafale deal was signed.


Hollande stated final month that France had “no choice” however to hitch with Reliance after it was pushed by the Indian authorities — feedback which had been seized upon by Indian opposition events.


Meanwhile, Defence Minister Nirmala Sitharaman who’s on a go to to France reiterated the federal government’s declare that it had no concept that Dassault Aviation would crew up with Reliance Group, run by Anil Ambani.


Several experiences say Dassault was pressured to decide on Reliance by Prime Minister Narendra Modi, regardless of its having virtually no expertise in the aviation sector.


On the eve of Sitharaman’s go to, French investigative web site Mediapart quoted the notes of a gathering between Dassault administration and staff’ representatives which described the selection 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 stated.

“And in an intergovernmental agreement, there are no mentions of any individual firms,” she stated.


Earlier on Wednesday, French web site “Mediapart’ reported that Dassault Aviation agreed to enter right into a  three way partnership with Anil Ambani’s Reliance Defence because it was offered as a ‘trade-off’ if the defence main had been to bag the 36 Rafale jet deal.


However, in its defence, Dassault Aviation clarified that it freely selected to make a partnership with India’s Reliance Group. “This joint-venture, Dassault Reliance Aerospace Ltd (DRAL), was created February 10, 2017. Other partnerships have been signed with other firms akin to BTSL, DEFSYS, Kinetic, Mahindra, Maini, SAMTEL,… Other negotiations are ongoing with a hundred-odd other potential companions”, it added.


Prime Minister Narendra Modi had introduced the procurement of a batch of 36 Rafale jets after talks with the then French President Francois Hollande on April 10, 2015 in Paris. The closing deal was sealed on September 23, 2016.


The Congress has been alleging large irregularities in the deal, saying the federal government was procuring every plane at a price of over Rs 1,670 crore as in opposition to Rs 526 crore finalised by the UPA authorities when it was negotiating the deal.


However, the federal government has vehemently rejected the allegations and asserted that it didn’t have any position in the choice of Reliance Defence. 

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