Dassault Aviation says it ‘freely’ chose Reliance for Rafale offsets
After a French media report cited a Dassault executive as saying that the joint venture with Reliance Defence was imperative and mandatory, Dassault Aviation clarified that his reference was to the offset part of the deal. Explaining the logic of the joint venture to worker representatives in 2017, a Dassault executive said this was done to ensure the French company got the “Rafale India export” business.
Hindustan Times pointed out in a report that it wasn’t clear whether his reference was to the offsets - the only way Dassault could benefit from these was if it partnered with a local company to make parts it could then source — or the original deal regarding the sale of 36 Rafale aircraft.
The clarification confirms that his reference was to the offsets.
In a statement issued in France late Wednesday, Dassault Aviation reiterated that it had “freely chosen” Anil Ambani’s Reliance Group as an offset partner for the Rafale deal and sold 36 fighters to India within the framework an inter-governmental agreement between the two countries.
Dassault is investing 50 per cent of the value of the ₹59,000-crore purchase in India under the offsets contract. The French company said it had forged a joint venture, Dassault Reliance Aerospace Ltd (DRAL) on February 10, 2017 to execute its offset commitments. DRAL will also be making Rafale parts.
The clarification comes even as Defence Minister Nirmala Sitharaman is travelling to France to hold the first defence minister-level dialogue with her French counterpart Florence Parly. She is also expected to visit Dassault’s Rafale fighter jet manufacturing facility outside Paris on Friday during her three-day visit to France.
The French plane maker said the company had also signed partnerships with companies such as BTSL, DEFSYS, Kinetic, Mahindra, Maini, SAMTEL.
“Other negotiations are ongoing with a hundred-odd other potential partners,” the firm said elaborating on its offset commitments.
“The DRAL plant will manufacture parts for Falcon 2000 business jets and, in a second step, parts for Rafale aircraft,” it added.
“In compliance with French regulations, Chief Operating Officer Loïk Segalen informed, May 11, 2017, the Central Works Council of the creation of the DRAL joint-venture in order to fulfil some of the offsets commitment,” the release added.
It said a team of Indian managers has been trained for six months at Biarritz in France and the first Falcon 2000 parts would be delivered by 2018-end.
The statement, seen as a response to a French media report, was issued on a day the Supreme Court directed the National Democratic Alliance (NDA) government to provide details of the decision-making process that led to the purchase of 36 Rafale fighter jets from France. The top court said it did not want to examine the issue of pricing and suitability of the Rafale jets but only the decision-making process to “satisfy ourselves”.
The top court asked the government to file the details by October 29 with the court’s registrar general in a sealed envelope.
The deal has become controversial with the opposition, led by the Congress, claiming that the fighter jets were overpriced.
Elections are due to take place in five states in November and December leading up to the 2019 general election.
Also, the Congress claims the earlier deal to sign up the state-owned Hindustan Aeronautics Ltd was scrapped and a new one signed to provide Reliance Defence this opportunity for an offset deal. Former French President Francois Hollande had earlier said that Reliance was made Dassault’s offset partner at India’s insistence. The French and the Indian governments, and Dassault and Reliance have repeatedly denied this.