Was Dassault forced to pick Reliance or just an offset partner in India, is the question that’s triggered a new Rafale controversy.
New Delhi: The latest twist in India’s Rafale deal controversy is a suggestion lost in translation.
French online journal Mediapart, which first reported that former French president Francois Hollande had said it was India’s suggestion that Rafale manufacturer Dassault Aviation choose Anil Ambani’s Reliance Defence as the offsets partner, wrote Wednesday evening that the company management had told its workers as much.
However, late Wednesday, Dassault Aviation issued a statement saying the company had committed to offsets — reinvestments in India — worth 50 per cent of the value of the Rafale deal (Rs 59,000 crore), and “freely chosen” Reliance as a partner.
“In order to deliver some of these offsets, Dassault Aviation has decided to create a joint venture,” it said in the statement.
“Dassault Aviation has freely chosen to make a partnership with India’s Reliance Group. This joint venture, Dassault Reliance Aerospace Ltd (DRAL), was created February 10, 2017,” it added.
Mediapart reported Wednesday that the Dassault management had told its trade unions it was “imperative and mandatory” for the company to choose Reliance as an offsets partner
The company was transferring its assembly line to produce the Falcon business jets at the DRAL facility being built in Nagpur, and had to explain to its workers why it was not creating jobs for French labourers. The company identified Reliance as “counterpartie” or “counterpart”.
The Mediapart report said: “At Dassault Aviation, according to a document obtained by Mediapart, the alliance with Ambani was indeed presented as a ‘counterpart’ to the Rafale sales contract.
“Dassault Aviation’s deputy chief executive officer, Loik Segalen, made this clear on May 11 2017 during a presentation of the Nagpur Dassault Reliance Aerospace joint venture to the staff representatives: ‘It was imperative and mandatory for Dassault Aviation to accept this counterpart, in order to get the export contract from India,’ said the no.2 (of) the group, according to elected staff,” the report added.
Julien Boussiou, the south Asia correspondent for the French newspaper Le Monde, interpreted the statement, and said Dassault was required to communicate important business decisions to trade unions in keeping with French labour laws.
It's about French labour laws, not so much about Anil Ambani
— julien bouissou (@jubouissou) October 11, 2018
“In May 2017, Dassault informed French trade unions about the construction of a plant in Nagpur, and explained to them why that plant could not be built in France (because of the offset),” he wrote.
Boussiou said the Mediapart report only pertained to the explanation Dassault gave workers on why the facility in question was being built in India. He thus sought to clarify that the explanation given was “about French laws, not so much about Anil Ambani”.
Congress takes note
The opposition Congress has called a press conference later Thursday in the wake of the latest reports from France. They allege that Dassault was obliged to take Reliance as a partner, despite its doubtful credibility in being able to deliver defence equipment, on a suggestion from Prime Minister Narendra Modi.
Reliance, which acquired the Pipavav Shipyards last year, is way behind schedule on delivering four offshore patrol vessels to the Indian Navy. It also does not have a track record in defence manufacture.
In 2015, it claimed to have partnered with Russian firm Almaz Antey, which will deliver the S-400 missile defence system to India. In the contract signed last week, there is no mention of Reliance.
On Wednesday, the Supreme Court had asked the Modi government to explain the decision-making process for choosing the Rafale fighter aircraft.