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Agencies
December 15, 2018

Indian court backs: Modi over French jet deal

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Agencies
December 15, 2018

NEW DELHI: India's top court dismissed Friday calls for an investigation into a French military jet deal that was threatening to damage Prime Minister Narendra Modi ahead of elections next year.

Critics had accused Modi of using the 2016 multi-billion dollar accord between India and French aircraft manufacturer Dassault for Rafale aircraft to favour a key billionaire backer. In an eagerly awaited judgement on a slew of petitions brought by activists and politicians, India's Supreme Court refused to intervene, saying it had "no doubt in the process".

"We do not find any substantial material on record to show that this is a case of commercial favouritism to any party by the Indian government," the three-judge bench said. Dassault initially won the contract to supply 126 jets to India in 2012, with 18 to be built in France and the rest in India in collaboration with the state-owned Hindustan Aeronautics Limited (HAL).

However, during a visit to France in 2015 Modi scrapped the deal, signed under the previous government led by the Congress party, and ordered instead 36 jets – all to be built in France – for an estimated $9.4 billion. No experienceUnder Indian defence procurement rules, foreign companies winning contracts must "offset" or reinvest half the total value in joint ventures or purchases with Indian firms.

But the new agreement, formally signed in 2016, raised eyebrows because Dassault chose as its local partner Reliance, a massive conglomerate owned by billionaire Anil Ambani. Ambani is believed to be close to Modi and Reliance had no previous experience in the aviation sector.

Former French president Francois Hollande added fuel to the fire in September with an interview with a French website when he said that Modi had pushed for Reliance to be on board. The Modi-led right-wing ruling Bharatiya Janata Party (BJP) and French company officials have throughout denied any wrongdoing.

French Foreign Minister Jean-Yves Le Drian told an Indian newspaper ahead of a visit Friday that there was no pressure from the Indian government to choose local partners. "We are proud of this agreement that contributes to India's security and is consolidating our strategic partnership," Le Drian, who was the country's defence minister in 2016, told the Times of India.

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