Dassault says Reliance their choice; Not involved, says French govt

The French government has said it was in no manner involved in the choice of Indian industrial partners for the multi-billion dollar Rafale fighter jet deal as former French president Francois Hollande's reported comments that New Delhi proposed Reliance Defence as the Indian partner for the contract escalated the political row over it.

While the French government said French companies have the full freedom to select Indian firms for the deal, Dassault Aviation, the makers of Rafale, said it had made the decision to partner with Reliance Defence Ltd.

Both the French government and French aerospace company Dassault issued separate statements following a French media report which quoted Hollande as saying that the Indian government proposed Reliance Defence as the partner for French aerospace giant in the Rs 58,000 crore Rafale deal and France did not have a choice.

The sensational comments quoted to Hollande by French publication Mediapart gave a new twist to the controversy as the Indian government has been maintaining it was not officially aware of whom the Dassault Aviation has selected as its Indian partner to fulfil offset obligations of the deal.

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

'The French government is in no manner involved in the choice of Indian industrial partners who have been, are being, or will be selected by French companies,' the French government said in its statement.

The report in Mediapart quoted Hollande as saying, 'It was the Indian government that proposed this service group, and Dassault which negotiated with Ambani. We had no choice, we took the interlocutor who was given to us.'

Reacting to Hollande's remarks, a defence ministry spokesman said, "It is reiterated that neither the government nor the French government had any say in the commercial decision."

NDTV reported that Hollande's office said he stood by his remarks made to Mediapart.

Hollande's comments drew sharp reactions from the opposition parties which have been accusing the government of massive irregularities in the deal and benefiting Reliance Defence Ltd (RDL) despite not having any experience in the aerospace sector.

"It is very important for the prime minister now to either accept Mr. Hollande's statement or state that Mr. Hollande is lying and tell what the truth is," Congress president Rahul Gandhi said.

He also claimed that various defence ministers of the National Democratic Alliance government have been lying to protect Modi.

In its statement, Dassault Aviation said it has decided to make a partnership with the Reliance Defence in accordance with the policy of 'Make in India'.

'This offsets contract is delivered in compliance with the Defence Procurement Procedure (DPP) 2016 regulations. In this framework, and in accordance with the policy of Make in India, Dassault Aviation has decided to make a partnership with India's Reliance Group. This is Dassault Aviation's choice,' the French company said.

The French government said, 'In accordance with India's acquisition procedure, French companies have the full freedom to choose the Indian partner companies that they consider to be the most relevant, then present for the Indian government's approval the offsets projects that they wish to execute in India with these local partners so as to fulfil their obligations in this regard.'

The Congress has been accusing massive irregularities in the deal, alleging that the government was procuring each aircraft at a cost of over Rs 1,670 crore as against Rs 526 crore finalised by the United Progressive Alliance government when it was negotiating procurement of 126 Rafale jets.

The Congress has also alleged that the government was benefitting Reliance Defence through the deal as the company has set up a joint venture with Dassault Aviation to execute the offset obligation for the deal.

Opposition parties have also alleged that Reliance Defence was formed only 12 days before the announcement of the Rafale deal by the prime minister on April 10, 2015. The Reliance group has rejected the charges.

The French government said the inter-governmental agreement it signed with India for supplying 36 Rafale aircraft concerns its obligations solely with regard to ensuring the delivery and quality of the aircraft.

'As it happens, agreements have already been signed by French companies with many Indian firms, both public and private, under the framework of Indian laws,' the statement said.

The Congress has also been demanding answers from the government on why state-run aerospace major HAL was not involved in the deal as finalised during the UPA.

Under India's offset policy, foreign defence entities are mandated to spend at least 30 per cent of the total contract value in India through procurement of components or setting up of research and development facilities.