A French investigative website has said that it had access to an internal document of Dassault Aviation that the latter had no option but to tie up with Reliance Defence as the offset partner in the Rafale deal, said reports on Thursday. Mediapart said the document showed that Deputy Chief Executive Officer of Dassault Aviation Loik Segalen said on 11, May 2017, during a presentation of the joint venture Dassault Reliance Aerospace Ltd from Nagpur, ‘It was imperative and obligatory for Dassault Aviation, to accept this condition, in order to obtain the export contract for Rafale from India.
Mediapart is the same portal that had last month quoted former French President Francois Hollande as claiming that the Centre had forced them into accepting Reliance Defence as offset partners on the Rs 59,000 contract to deliver 36 jets to India. The French government and Dassault, however, had rebutted Hollande’s claim. The defence ministry had also dismissed the controversy as ‘unnecessary’. Under the contract, the French companies involved must plough back 50% of the contract value to India as offsets or re-investments.
Under the offsets clause, France is to reportedly invest 50 % 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, as per the contract, said The Indian Express.
While the latest Mediapart report has come at a time that Defence Minister Nirmala Sitharaman is in France on a three-day visit, Dassault has gone ahead and offered an explanation. In an official statement, it said, “Within the framework of September 2016 Inter Govt Agreement between France and India, Dassault Aviation sold 36 Rafale aircraft to India. In compliance with Indian regulations , Dassault Aviation committed to offsets worth 50% of the value of the purchase. In order to deliver some of these offsets, Dassault Aviation has decided to create a joint venture. Dassault Aviation has freely chosen to make a partnership with India’s Reliance Group. This joint-venture, Dassault Reliance Aerospace Ltd, was created February 10, 2017.”