Reliance has 10 per cent of offset in Rafael deal: Dassault CEO

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Paris, Oct 11 Dassault Aviation’s three way partnership with Reliance represents round 10 per cent of the offset investments below the Rafale jet deal, Dassault CEO Eric Trappier has mentioned.

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

Separately on Thursday, talking at a briefing in Paris, Defence Minister Nirmala Sitharaman reiterated the federal government’s declare that it had no concept that Dassault Aviation would workforce up with Reliance Group, run by Anil Ambani.

Several stories 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 employees’ 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 mentioned.

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

“It is more for the Companies which have chosen A, B or C as their partners to answer questions if there are any,” she mentioned.

In a press release, Dassault launched a transcript of what it mentioned was Trappier’s interview with AFP in which he was requested in regards to the standing of the offsets.

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

“In full compliance with this regulation, Dassault Aviation therefore decided to set up the DRAL joint venture with Reliance and build a plant in Nagpur, which should enable us to meet about 10% of these offset obligations. We are in negotiations with about a hundred Indian Companies and partnerships have already been concluded with about thirty of them,” he was quoted as saying.

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

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 straight from France.

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

“Dassault Aviation due to this fact 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 alternative 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 mentioned it had “freely chosen” to kind a three way partnership with Reliance. But that stance was contradicted lately by former French president Francois Hollande, below whose watch the Rafale deal was signed.

Hollande mentioned 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.

Under Indian defence procurement guidelines, international firms profitable contracts should “offset” or reinvest half the whole worth — in this case round eight billion euros — in joint ventures or purchases with Indian corporations. VJ PYK PMS

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