Rafale Controversy : Internal Dassault Paper Shows Reliance Mandatory For Deal

According to an investigative report published in Mediapart, Reliance was a 'Trade-off' for Bagging Rafale Deal

An internal document of Dassault Aviation shows that picking Anil Ambani’s Reliance Defence as the offset partner in India was a “trade-off” for the 36 Rafale deal, according to the investigative report published by French investigative journal Mediapart.

The report says the document shows a top Dassault official, Loik Segalen had explained to its staff on 11 May 2017, that the joint venture was a “trade-off”, that was “imperative and mandatory” to win the Rafale deal.

At Dassault Aviation, according to a document obtained by Mediapart, the partnership with Ambani had effectively been presented like a”trade-off” for the Rafale contract. Dassault Aviation’s Deputy Chief Executive Officer, Loïk Segalen, said this clearly on May 11, 2017, during a presentation of the Dassault Reliance Aerospace joint venture to staff representatives in Nagpur. “It was imperative and mandatory for Dassault Aviation to accept this trade off to obtain the contract to export Rafale to India”, said the number 2 (deputy CEO) of the group said, according to a report prepared by the staff.

– Translated in English

When contacted by Mediapart, the Dassault group refused to comment on this document.

On 21 September, former French President Francois Hollande told Mediapart that India had given no choice to Dassault, but to work with Reliance Defence. Hollande claimed the Indian government had proposed Reliance’s name for the pact, which was agreed upon when he was president.

However, India’s Defence Ministry denied the former French president’s claim while France said it is not involved in choosing Dassault’s industrial partners for projects in India. In a separate statement, Dassault Aviation had denied the report and said it “has freely chosen to make a partnership with India’s Reliance Group.”

Ambani’s Reliance Defence became part of the offset programme of the Rs 59,000-crore Rafale deal through DRAL in which it holds a 51% stake. Dassault Aviation holds 49% stake in DRAL. In October 2017, Dassault CEO Eric Trappier had announced an investment of 100 million euros in the DRAL factory planned at Nagpur, which was scheduled to start production in 2018.

The deal for 36 Rafale jets was announced by Narendra Modi on 10 April 2015 during his visit to Paris which led to the cancellation of the 126 aircraft deal being negotiated by the UPA. The deal was signed on 23 September 2016 in Delhi between then Defence Minister Manohar Parrikar and his French counterpart.

As per contract under the offsets clause, France is to invest 50 per cent of the total order cost in local contracts in India, worth Rs 30,000 crore. The offset obligations of the deal are to be discharged from September 2019 to September 2023.

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