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April 16, 2016

All you know about Rafale deal:

What is Rafale aircraft?

Rafales are twin-engine Medium Multi-Role Combat Aircraft (MMRCA)


manufactured by >Dassault Aviation, a French firm. Rafale fighter jets are
positioned as ‘omnirole’ aircrafts that capable to perform a wide-range of
combat roles such as >air supremacy, >interdiction, >aerial
reconnaissance, >ground support, in-depth strike, anti-ship strike and
nuclear deterrence.

Why has India opted for Rafale?

Rafale was not India’s only choice. Several international aviation


manufacturers expressed interest upon knowing the Indian government’s
mammoth plan to revamp its Indian Airforce fleet by introducing MMRCAs.

Six renowned aircraft manufacturers competed to bag the contract of 126


fighter jets, which was touted to be the largest-ever defence procurement
deal of India.

The Initial bidders were Lockheed Martin’s F-16s, Boeing’s F/A-18s,


Eurofighter Typhoon, Russia’s MiG-35, Sweden’s Saab’s Gripen and
Rafale.

All aircraft were tested by the IAF and after careful analysis on the bids, two
of them — Eurofighter and Rafale — were shortlisted. Dassault bagged the
contract to provide 126 fighter jets, as it was the lowest bidder and the
aircraft were said to be easy to maintain.

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When did the actual procurement process begin?

Indian Air Force sought additional fighter jets in 2001. The current IAF fleet
largely consists of heavy and light-weight combat aircraft. So the Defence
Ministry considered bringing in intermediate medium-weight fighter jets.
Though the idea has been around since 2001, the actual process began in
2007. The Defence Acquisition Council, headed by then Defence Minister
A.K. Antony, approved the >Request For Proposal to buy 126 aircraft in
August 2007. This kick-started the bidding process.

How many Rafales are we buying and what’s the cost involved?

The deal was initially estimated to be worth $10.2 billion (Rs.54,000 crore).
The plan included acquiring 126 aircraft, 18 of them in fly-away condition
and the rest to be made in India at the Hindustan Aeronautics facility under
transfer of technology.

So Rafale won the contract. And India is buying 126 jets. That’s it?

No, it’s trickier than that. After Rafale won the contract, the Indian side and
Dassault started negotiations in 2012. While it is usual for such
negotiations to stretch to several months, the Rafale negotiations has been
on for almost four years now. The agreement was signed only in January
this year.

Why this delay?

Both India and France witnessed national elections and a change in


government while the negotiations were under way. Pricing was another
factor. Even during the signing of the purchase agreement, both the sides
>couldn’t reach a conclusion on the financial aspects. According to

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sources, the price of an aircraft it about Rs.740 crores and India wants
them for at least 20 per cent lesser cost.

Though the initial plan was to buy 126 jets, >India scaled it down to 36, that
too in ready condition.

How important is this deal to both India and France?

France: Rafale jets are currently being used mostly by France and also by
Egypt and Qatar. Dassault is hoping that export of Rafale jets will help the
company meet its revenue targets. India was the first country that agreed to
buy Rafale, after it was used in Libyan airstrikes. If India inducts these jets
in its military fold, other nations could express its willingness to buy
Rafales.

India: India chose Dassault over its traditional partner Russia’s MiG. It also
ignored U.S.’ Lockheed, at a time when India and U.S. were aiming for
closer ties. Procurement of combat aircraft is long overdue for the Indian
Air Force. Further delay can only make things worse. This deal is India’s
biggest-ever procurement. In the effectiveness of the Rafale deal lies the
future of other defence procurements.

New Delhi: In April 2015, Prime Minister Narendra Modi had announced
that India will buy 36 French-manufactured Rafale fighter jets off-the-shelf
from Dassault, the French aircraft builder and integrator. The Rafale was
chosen in 2012 over rival offers from the United States, Europe and
Russia. The step was needed to upgrade India's ageing fleet. The original
plan was that India would buy 18 off-the-shelf jets from France's Dassault
Aviation, with 108 others being assembled in India by the state-run
Hindustan Aeronautics Limited or HAL in Bengaluru.
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The Modi-led BJP government, however, rowed back from the commitment
of the last UPA government to buy 126 Rafales, saying the twin-engined
planes would be too expensive and the deal fell through after nearly
decade-long negotiations between India and France. There were a lot of
hiccups over costs of the aircraft. However, faced with the dipping number
of fighters and a pressing need to upgrade the Indian Air Force, Prime
Minister Narendra Modi intervened and decided to buy 36 "ready-to-fly"
fighters instead of trying to acquire technology from Dassault and make it in
India.

Soon after the deal was declared, the Congress accused the ruling BJP of
non-transparency in the multi-billion dollar deal and called it "one of the
biggest failures" of the 'Make-in-India' programme.

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In January 2016, India confirmed order of 36 Rafale jets in defence deal with France and under
this deal, Dassault and its main partners - engine-maker Safran and electronic systems-maker
Thales - will share some technology with DRDO (Defence Research and Development
Organisation) and some private sector companies and HAL under the offsets clause.

The twin-engine Rafale combat jet is designed from the beginning as a multi-role fighter for air-
to-air and air-to-ground attack is nuclear-capable and its on-board Electronic Warfare (EW)
systems can also perform reconnaissance and radar jamming roles.

Nearly one- and-half years after Prime Minister Narendra Modi announced
the proposal during a visit to Paris, finally in September 2016, India signed
an inter-governmental agreement with France, dubbed as "Rafale deal", in
which India will pay about Rs. 58,000 crore or 7.8 billion Euros for 36 off-
the-shelf Dassault Rafale twin-engine fighters. About 15 per cent of this
cost is being paid in advance. As per the deal, India will also get spares
and weaponry, including the Meteor missile, considered among the most
advanced in the world.

Additionally, an accompanying offset clause was sealed through which


France will invest 30 per cent of the 7.8 billion Euros in India's military
aeronautics-related research programmes and 20 per cent into local
production of Rafale components.

In November 2016, however, a political warfare over the Rafale deal began
and the Congress accused the government of causing "insurmountable
loss" of taxpayers' money by signing the deal worth Rs. 58,000 crores. It
also claimed that the Anil Ambani-led Reliance Defence Limited had been
unfairly picked to be the French firm's Indian partner. The Congress alleged
that the cost of each aircraft is three times more than what the previous
UPA had negotiated with France in 2012.

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The claims were rebutted by Defence Minister Nirmala Sitharaman and Anil
Ambani-led Reliance Defence Limited with the government saying that the
renegotiated deal was transparent and better than the deal negotiated by
the previous UPA government as it includes a superior weapons package
and logistical support, which had been absent in the previous one. Reliance
Defence had also said that its subsidiary Reliance Aerostructure and
Dassault Aviation formed a joint venture - Dassault Reliance Aerospace,
after a bilateral agreement between two private companies and "the Indian
government has no role to play in this."

The Congress, however, kept up its attacks on the government for refusing
to table details of the Rafale deal over alleged irregularities. The Defence
Minister Nirmala Sitharaman told the Parliament earlier this week that the
details of the deal with France for the Rafale fighter jets cannot be
disclosed as per the inter-governmental agreement as it is "classified
information".

Officials say that due to national security reasons, there is a confidentiality


clause in the Rafale deal which bars the buyer and seller from talking about
the pricing, making it impossible to reveal detail about the defence deals.

In a counter-attack to the Congress, Finance Minister Arun Jaitley accused


the party of "seriously compromising" country's security by seeking details
of weaponry purchased along with the aircraft. He also advised Congress
chief Rahul Gandhi to "learn" from former Defence Minister Pranab
Mukherjee "lessons on national security".

The delivery of the Rafale jets is scheduled to begin from September, 2019.

***
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Not a single Dassault Rafale jet fighter has landed in India but the Medium
Multi-Role Combat Aircrafts (MRCA) have ensued political slugfest in and
outside Parliament between the Opposition led by Congress and the
Narendra Modi government.

Congress president Rahul Gandhi has leveled a direct charge on Prime


Minister Narendra Modi saying, "Modi has personally got the deal done.
Modi had personally gone to Paris. Personally the deal was changed.
Entire India knows it.

He alleged that

The defence minister is saying she will not inform India, the Indian martyrs
and their relatives about the money spent on buying those aircraft. What
does this mean? This only means there is some scam.

Rafale deal was a scam engineered by the Modi government. "The defence
minister is saying she will not inform India, the Indian martyrs and their
relatives about the money spent on buying those aircraft. What does this
mean? This only means there is some scam," he said.

The Congress effort to make the 36-jet Rafale deal the Bharatiya Janata
Party's Bofors, and to snare Narendra Damodardas Modi in its exhaust
fumes just as Bofors flattened Rajiv Gandhi, may or may not succeed.

Not because pay-offs did or did not exist. Almost all defence deals of this
kind involve pay-offs at different levels -- as anyone who is not a babe in
the wood knows. But it is hard to get conclusive facts, and there is no
evidence available of bribes in the case of Rafale.

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The difference between the two cases is that the Bofors scandal erupted
following a Swedish radio broadcast and a panic-stricken response by the
Rajiv government. The issue became a scandal in Sweden, not just India,
and set off prosecutorial activity there.

Without that (combined with good media sleuthing), the precise amount of
the pay-offs and the identities of beneficiaries would not have become
public. Nothing of the kind is likely to happen in France.

The Rafale brouhaha therefore is only in India, and is focused on


establishing that the deal which Mr. Modi and his government signed
involves a higher price per aircraft than the one that the previous Congress-
led government was negotiating.

But a one-to-one comparison for such complex weapon packages is next to


impossible to work out and be beyond dispute.

The relevant years are different and bring in the inflation factor, the
numbers of aircraft are different, the nature of the contract (buy vs buy-
plus-make) is different, the add-ons are different, the weapons package is
different, and the post-purchase maintenance terms and guarantees are
different.

Assuming for the sake of argument that pay-offs exist, they can easily be
masked.

So it is hard to understand why the government treats the price details as


secret.

Nothing would be lost in making them public, especially since the broad
numbers are already available.

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The point is that even if the government were to adopt a transparent
approach on the cost details, much of the information on the deal would
have to be kept secret and that would come in the way of a proper
comparative assessment.

Meanwhile, the scandal which does not need any unearthing because it
stares the country in the face, is the way defence purchases are being
done, or not done.

The need for 126 fighter aircraft was established in 2001, but a request for
proposals from fighter aircraft manufacturers went out only in 2007.

The Rafale was chosen in 2012, but reports said the actual cost was
proving to be twice what had initially been put out.

So price haggling went on for two years, until there was a change of
government.

A year after that, and eight years after the request for proposals, Mr Modi
did a bilateral deal for two of the original seven squadrons.

Suddenly, the air force's need for an additional five squadrons became
unimportant, without explanation.

Naturally, the air force continues to be short of planes. So, more than a
decade after the last selection round got under way, the same process is
about to start again for the same kind of aircraft, naturally with the same
likely bidders.

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If the country is lucky, an order may be placed in five years and the planes
start getting delivered a couple of years after that. That would take the time
table to 2025 -- and nearly a quarter-century of contracting effort.

This is not an isolated example.

In 1999 the government decided on ordering conventional submarines; half


a dozen were to be commissioned by 2012, and another half-dozen after
that. So far, in 2018, the navy has commissioned one submarine, instead of
a possible 12.

There are similar stories concerning the army, like taking 30 years to sign
the first howitzer deal after Bofors. None of this is a secret.

Indeed, all of it and more has been aired repeatedly in the media by very
competent writers, but the defence acquisition system seems paralysed
and incapable of change. Why doesn't Parliament hold the government to
account on this issue?

T N Ninan

New Delhi:

Dassault, one of the world's most established and experienced defence


manufacturers, picked Anil Ambani's debt-ridden firm as a partner in India,
"because it was registered with the MCA (Ministry of Corporate Affairs) and
had land in Nagpur which provided access to the runway," said top sources
at the French firm, speaking to NDTV on the condition of anonymity.

As justification, those reasons are unlikely to tamp down the opposition's


allegations that Mr. Ambani benefited from brazen crony capitalism in a

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massive $8.6 billion deal for India's purchase of 36 Rafale fighter jets from
France, a deal that was negotiated personally and then announced by
Prime Minister Narendra Modi in 2016 during a visit to Paris.

For months, the opposition Congress has alleged wrongdoing in the Rafale
deal; it claims PM Modi overpaid for the planes and struck the deal without
any transparency; the government has hit back, accusing the Congress of
making wild allegations without any evidence and pointing out that the
Rafale deal, though with vastly different contours, originated when the
Congress was in power.

Last week, the opposition received a huge shot in the arm with former
French president Francois Hollande, who negotiated the Rafale deal with
PM Modi, declaring that it was the Indian government who proposed
Reliance -- "we had no choice", he said. But a day later, he said that it was
for Dassault to comment on whether it had been pressured to choose Mr
Ambani's firm as an offset partner -- as part of the contract, Dassault has to
invest 50 per cent of the overall value of the deal or Rs. 30,000 crore in
partnering with defence manufacturers in India.

Dassault has emphatically said it was not influenced to pick Anil Ambani;
but today, speaking to NDTV, sources at the defence manufacturer said
that they began engaging with Anil Ambani after the defence manufacturing
company "changed hands" from his older brother, Mukesh, to him and that
the plans for the joint venture were firmed up at Aero India, the massive air
show held in Bengaluru in 2015, just 2 months before the Rafale deal was
announced by PM Modi in Paris.

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The plans to buy Rafales for the Air Force were first set upon by the
government of Dr. Manmohan Singh; originally, HAL, the state-run
company, was to play a large role in the manufacturing of 108 planes;
Mukesh Ambani's defence firm was to be a partner contributing to the
process but its intended role was not clear. Dassault has maintained that it
began talks with Mukesh Ambani's firm in 2012, then changed later to
discussions with the company headed by his brother.

That's because Mukesh Ambani, the country's richest man, exited the
Rafale landscape over the complicated and lengthy procurement rules that
accompany defence deals; his defence unit was then taken over by Anil
Ambani, whose own business empire was bleeding profusely.

Just 17 days before Prime Minister Narendra Modi announced that India
would buy 36 Rafale fighter jets from France off-the-shelf, the top boss at
Dassault, which is the parent company of Rafale, made a speech where he
said that the company was looking forward to a partnership with HAL, the
state-run defence manufacturer.

"The statement by Dassault Chairman on the impending deal with HAL was
because Dassault was hopeful of the (126 aircraft) deal and did not know
what was happening inside the Ministry of Defence," a Dassault source told
NDTV today.

The video of the Dassault chief, Eric Trappier, professing this, was shared
on social media today by the opposition Congress to bolster its claims that
PM Modi cut out HAL to favour Anil Ambani, whose rookie defence
manufacturing company benefitted greatly from the new deal. A big part of
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Dassault's commitment to investing in India is met through a joint venture
with Anil Ambani's firm in Nagpur which will manufacture parts for some
Dassault jets; none of these will be used in the Rafales that India has
bought from France.

Those who defend the new Rafale deal say that HAL priced itself out of
the deal because the number of hours and people it needed to build
the planes was far larger than what Dassault was offering in France.
The government also says that it was during the Congress's time that
HAL became an unviable proposition, so the Congress is wrongly
accusing PM Modi's administration of wronging a public sector
company.

HAL, sources in favour of the deal say, never had any interest in serving as
an offset partner -- instead it wanted to build the main structure of the
fighter jets here.

The government has separately alleged that former French president


Hollande's allegations have been made to save his own skin -- he's
accused of conflict of interest because an entertainment company owned
by Anil Ambani co-produced a film by the French leader's partner right
when the crucial Rafale deal was finalised.

A French minister today said Mr. Hollande's allegations could hurt ties with
India -- but he did not counter them as untrue.

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Rahu Dumbty sat on a Rafale,

Rahu Dumbty had a great fall,

All the French-men and Con-G-men

Could not put Rahu Dumbty together again!

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New Delhi: Sept. 2018. Dassault, one of the world's most established and
experienced defence manufacturers, picked Anil Ambani's debt-ridden firm
as a partner in India, "because it was registered with the MCA (Ministry of
Corporate Affairs) and had land in Nagpur which provided access to the
runway," said top sources at the French firm, speaking to NDTV on the
condition of anonymity.

Dassault has emphatically said it was not influenced to pick Anil Ambani;
but today, speaking to NDTV, sources at the defence manufacturer said
that they began engaging with Anil Ambani after the defence manufacturing
company "changed hands" from his older brother, Mukesh to him and that
the plans for the joint venture were firmed up at Aero India, the massive air
show held in Bengaluru in 2015, just 2 months before the Rafale deal was
announced by PM Modi in Paris.

Minister of Defence Nirmala Sitharaman hit back at allegations of


corruption and crony capitalism in the Indo-French Rafale aircraft deal. In
an exclusive interview to India Today TV, Sitharaman reiterated the
government's stand on the Rafale deal calling it "completely legal" and that
the Narendra Modi government followed all laid-down rules and processes
before signing the agreement.

Sitharaman also attacked Rahul Gandhi and his Congress party for
"vitiating" the political atmosphere in the country and for making allegations
without doing "homework".

"You [Congress] haven't even done your homework [before making


allegations about the Rafale deal] and that pains me... Do your homework

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and then ask questions, I will answer them," Sitharaman said while
speaking to India Today TV's Rahul Kanwal.

When asked about former French president Francois Hollande's claim that
the Indian government had recommended Ambani's company as an offset
partner, Sitharaman said that maybe Hollande said what he said "for the
sake of it".

If Hollande's claim that the Indian government "did not give an option [other
than to partner with Reliance Defence]" was true, then why is Dassault
tying up with seven Indian companies as some news reports have
suggested, Sitharaman asked.

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