Rafale deal: Modi’s Bofors moment

Till the year 2015, Rafale, perhaps the most notorious fighter aircraft today, was the world’s worst-selling production fighter aircraft. The French air force had slashed its initial commitment to purchase 336 aircraft, bringing it down to 272 aircraft. Then came Egypt, Qatar and India to the rescue of the fighter, placing orders for the extremely expensive aircraft.

The Indian Air Force chose Rafale in 2012 over rival offers from the United States, Europe and Russia. Contract negotiations began with its manufacturer Dassault in 2012 but could not be completed by the Indian government in two years. In April 2015, new Indian Prime Minister Narendra Modi announced that India would purchase 36 Rafale fighter jets off-the-shelf from the manufacturer. In January 2016, India confirmed to purchase 36 Rafale jets. Finally in September 2016, India signed an inter-governmental agreement or the "Rafale deal". India was to pay Rs58,000 crores or 7.8 billion Euros for 36 off-the-shelf Dassault Rafales with 15 per cent of the cost being paid in advance. Under the offset clause, France was to 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. The delivery of the Rafale jets was scheduled to begin from September, 2019.

Before Modi, the Congress government wanted to buy 18 off-the-shelf jets with 108 others being assembled in India by the state-run Hindustan Aeronautics Limited or HAL in Bengaluru. But Modi had other ideas.

In November 2016, 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 Rs58,000 crores. It alleged that the cost of each aircraft was three times more than what the previous UPA government had negotiated with France in 2012. With its guns blazing, the Congress has accused the ruling BJP of non-transparency in the multi-billion dollar deal, calling it "one of the biggest failures" of the 'Make-in-India' programme.

The major criticism is that the billionaire Anil Ambani-led Reliance Defence Limited had been ‘unfairly picked’ to be the French firm's Indian partner. It has been alleged that Modi gave preferential treatment to industrialist Anil Ambani, the billionaire chairman of Reliance Group, to the detriment of state-run Hindustan Aeronautics Limited (HAL). Ambani is a businessman from Modi’s home state, Gujarat, who is widely regarded as being close to the BJP government. He had no experience in the aviation field.

On the other hand, beleaguered Indian Defence Minister, Nirmala Sitharaman, told the parliament that the details of the deal with France for the Rafale fighter jets could not be disclosed as per the inter-governmental agreement since it is "classified information". Finance Minister Arun Jaitley accused Congress of "seriously compromising" country's security by seeking details of weaponry purchased along with the aircraft.

Meanwhile, former French president Francois Hollande has supported Congress’ case, saying that France was given no choice on the Indian partner for manufacturer Dassault. Congress President Rahul Gandhi, who has led the opposition's focus on the deal, wrote: "Thanks to Francois Hollande, we now know he (Modi) personally delivered a deal worth billions of dollars to a bankrupt Anil Ambani. The PM has betrayed India. He has dishonoured the blood of our soldiers."

Apparently, the purchase of Rafale aircraft has evolved into a mega corruption scandal in defence procurement. Claims and counterclaims are flying thick and fast; the Modi-Ambani” unholy nexus does not bode well for the Modi Sarkar. The costs of favouring a private conglomerate over a public company in the aircraft deal are mounting for the Modi government.