Had no role in selection of Reliance for Rafale: MoD

The Defence Ministry on Saturday said it would officially know about the identity of offset partners for the Rafale deal only in 2020 and ruled out any role in the selection of Reliance Defence for the purpose.

“As per the guidelines, the vendor is to provide the details of the offset partners either at the time of seeking offset credit or one year prior to the discharge of offset obligation, which in this case will be due from 2020,” the defence ministry said in a statement.

The MoD response comes in wake of former French President Francois Hollande’s sensational claim that the French side had barely any choice in deciding the Indian offset partner as Indian government pushed for Anil Ambani-led Reliance Defence in that role.

“Government of India has no role in the selection of Indian Offset partner which is a commercial decision of the Original Equipment Manufacturer,” the statement said

“Unnecessary controversies are being sought to be created following media reports regarding a statement purportedly made by the former French President, Francois Hollande, concerning the selection of Reliance Defence as the Offset partner by Dassault, the manufacturers of Rafale aircraft,” the statement said.

The defence ministry statement also makes a reference to an earlier tie-up between Dassault Aviation and Mukesh Ambani led Reliance Aerospace Technologies Limited when the MMRCA process to buy 126 medium multi-role combat aircraft was in progress.

However, the Memorandum of Understanding between Dassault and RATL was allowed to lapse in 2014 as the Mukesh Ambani-led company decided to quit the defence and aerospace business.

Referring to the press statement issued by Dassault Aviation in which the company said it was negotiating with many other companies to be a partner in the project, the MoD statement reiterated the government’s stated position of not having any role in selecting the offset partner, which was a commercial decision of the French vendor.

The offset policy, says the MoD statement, was issued in 2005 and revised subsequently in order to develop a strong indigenous defence industry. It’s a flow back arrangement in which a capital acquisition programme is leveraged to develop the Indian defence industry.

The Rs 59,000 crore Rafale deal comes with a 50% offset clause, which means nearly Dassault Aviation will invest nearly Rs 30,000 crore in Indian defence companies that will manufacture systems and components required in various aircraft manufactured by the French aviation giant.