Dassault Aviation, the manufacturer of Rafale, is said to have already carried out a test production of certain parts that could be manufactured in India.
In Episode 1544 of CutTheClutter, Editor-in-Chief Shekhar Gupta looks at some top economists pointing to the pitfalls of ‘currency nationalism’ with data from 1991 to 2004.
Using this technology, IDF carried out fully robotic combat missions, drastically reducing risk to Israeli troops. The robotic combat task force also enhanced situational awareness.
While we talk much about our military, we don’t put our national wallet where our mouth is. Nobody is saying we should double our defence spending, but current declining trend must be reversed.
This totally falsifies Rahul Gandhi’s claim that JV with Reliance (Anil Ambani Group) will be manufacturing 36 Rafale planes ordered by India. The true facts, as reported by Dassault, are that that the Nagpur facility will be used to supply components for Falcon planes. As per Indian norms, any MNC company engaged in defence manufacturing can have a JV with an Indian company with a stake not exceeding 49%. So, where is the illegality? Dassault has plans to expand this activity at Nagpur so as to make complete production of Falcon planes, as as to make a significant cost savings that can give Dassault a competitive edge in the international market. Can this investment, which as per the current reports is not likely to exceed Rs. 900 crore be counted for offset computation? Definitely yes. Offsets can be classified into two types – direct and indirect. Direct offsets involves co-production and transfer of technology, whereas indirect offsets may or may not related to the contracted sell-purchase activity ( manufacture of Rafale planes in the instant case). If one refers to para 3.1 (a) to (d) of DPP 2013 both types of offsets are allowed. Additionally investment in research activity of DRDO is also eligible (paras 3.1 (e) & (f) with a multiplier effect (higher weightage). Furthermore, para 71 of the DPP states : – ” There may be occasions when procurements would have to be done from friendly foreign countries which may be necessitated due to geo-strategic advantages that are likely to accrue to our country. Such procurements would not classically follow the Standard Procurement Procedure and the Standard Contract Document but would be based on mutually agreed provisions by the Governments of both the countries. Such procurements will be done based on an Inter Governmental Agreement after clearance from CFA. ” Para 73 states:-. “In certain acquisition cases, imperatives of strategic partnerships or major diplomatic, political, economic, technological or military benefits deriving from a particular procurement may be the principal factor determining the choice of a specific platform or equipment on a single vendor basis. These considerations may also dictate the selection of particular equipment offered by a vendor not necessarily the lowest bidder (L1). Decisions on all such acquisitions would be taken by the Cabinet Committee on Security (CCS) on the recommendations of the DPB.”. Lastly as per para 8.11 of Appendix D it is stated that : “ In exceptional cases, DOMW may recommend change in offset partner or offset component on being convinced that the change is necessary to enable the vendor to fulfil offset obligations.”. Thus, Dassault is free to change Reliance if Reliance is not able to bring in required matching investment! This is the most likely scenario taking into account the weakened financial position of ADAG group.
This totally falsifies Rahul Gandhi’s claim that JV with Reliance (Anil Ambani Group) will be manufacturing 36 Rafale planes ordered by India. The true facts, as reported by Dassault, are that that the Nagpur facility will be used to supply components for Falcon planes. As per Indian norms, any MNC company engaged in defence manufacturing can have a JV with an Indian company with a stake not exceeding 49%. So, where is the illegality? Dassault has plans to expand this activity at Nagpur so as to make complete production of Falcon planes, as as to make a significant cost savings that can give Dassault a competitive edge in the international market. Can this investment, which as per the current reports is not likely to exceed Rs. 900 crore be counted for offset computation? Definitely yes. Offsets can be classified into two types – direct and indirect. Direct offsets involves co-production and transfer of technology, whereas indirect offsets may or may not related to the contracted sell-purchase activity ( manufacture of Rafale planes in the instant case). If one refers to para 3.1 (a) to (d) of DPP 2013 both types of offsets are allowed. Additionally investment in research activity of DRDO is also eligible (paras 3.1 (e) & (f) with a multiplier effect (higher weightage). Furthermore, para 71 of the DPP states : – ” There may be occasions when procurements would have to be done from friendly foreign countries which may be necessitated due to geo-strategic advantages that are likely to accrue to our country. Such procurements would not classically follow the Standard Procurement Procedure and the Standard Contract Document but would be based on mutually agreed provisions by the Governments of both the countries. Such procurements will be done based on an Inter Governmental Agreement after clearance from CFA. ” Para 73 states:-. “In certain acquisition cases, imperatives of strategic partnerships or major diplomatic, political, economic, technological or military benefits deriving from a particular procurement may be the principal factor determining the choice of a specific platform or equipment on a single vendor basis. These considerations may also dictate the selection of particular equipment offered by a vendor not necessarily the lowest bidder (L1). Decisions on all such acquisitions would be taken by the Cabinet Committee on Security (CCS) on the recommendations of the DPB.”. Lastly as per para 8.11 of Appendix D it is stated that : “ In exceptional cases, DOMW may recommend change in offset partner or offset component on being convinced that the change is necessary to enable the vendor to fulfil offset obligations.”. Thus, Dassault is free to change Reliance if Reliance is not able to bring in required matching investment! This is the most likely scenario taking into account the weakened financial position of ADAG group.