Where did Rs 1,30,000 crore figure come in Rafale deal?
business, India

Where did Rs 1,30,000 crore figure come in Rafale deal?

Rafale Deal has been in controversy for quite some time now. During no-confidence motion against NDA in Lok Sabha on July 20, 2018, the Congress had raised their suspicion. Rahul Gandhi in his speech had claimed that the government’s refusal from revealing the price of the fighter jet with an excuse of an Agreement of Secrecy with French government is a lie and baseless. Ever since then the controversy has remained a hot topic in the political corridors as well as in media.

What is Rafale Deal?

In 2016, India signed an inter-governmental agreement with France called Rafale Deal. India in this deal bought 36 off-the-shelf Dassault Rafale twin-engine fighters for a price estimated to be Rs 58,000 crore or 7.8 billion Euros. When the government was asked about the cost details of the fighter jets, it stood firm to its statement that the details are a matter of National Security.

What is the Controversy?

The government declined from revealing any information related to the cost of fighter jets saying that due to National security concerns it cannot be disclosed. Later the Defence Minister Nirmala Sitharaman stepped back by saying that there is a secrecy agreement between India and France that prohibits from revealing such details. Although more than once the price details had come in public forum.

Once in November 2016, the same government had responded the question in Lok Sabha on the fighter jets’ interrogation. Answering a question, the defence ministry had said that “Inter-Governmental Agreement with the Government of French Republic has been signed on 23.09.2016 for the purchase of 36 Rafale aircraft along with requisite equipment, services and weapons. Cost of each Rafale aircraft is approximately Rs 670 crore and all the aircraft will be delivered by April 2022.”

Also Read: Journalists covering Rafale deal being threatened: Rahul Gandhi

The next time actual price of 36 aircraft was disclosed was when a press release by Dassault and Reliance Defence and financial press release statement of Dassault for 2016 was made public.

Apart from these, the government has been claiming secrecy clause in the agreement binds them from disclosing the details. Whereas, the fact is that the pact actually prohibits from revealing technical specifications and operational capabilities of the aircraft and not the price details.

Facts that gives room to suspicion

  • The whole procedure of buying any fighter jet was changed
  • The government is unwilling to reveal the facts and details
  • The Defence Minister Nirmala Sitharaman’s changing statements
  • Making excuse of a secrecy pact that doesn’t exist in this particular deal
  • The shift in contracts from a company with huge experience in making fighter jets to another company that has no experience at all and on an addition have a reputation of failing in large projects

The Reliance Defence and the figures

  • Reliance Defence Acquired 30.7 per cent stake in Pipavav Defence and then renamed it as Reliance Naval & Engineering Ltd, making it the largest acquisition in defence sector in India
  • Total Assets of Reliance Defence is Rs 10,000 crore
    as of now making it is capable to cater to all types of Warships and Submarines
  • Reliance Defence also holds 35 industrial licenses covering full spectrum of defence platforms that is Naval, Aviation and Land Systems
  • Its Equity investment in defence is of Rs 500 crore over next three years
  • It also has a Key Strategic Partnerships in place for Transfer of Technology in line with “Make in India” and “Skill India”
  • Joint Venture with Dassault Aviation – Key offset partner for 36 Rafale Aircrafts
    JV with Thales for Electronic Warfare, Radars & Under Water System
    Daher Aerospace (France) for Aerospace components & composites
    Strategic Partnership with STRATA (UAE) for Composites
    Strategic Partnership with Genesys (USA) for Avionis and systems

The Dassault Reliance Aerospace Ltd and the figures

  • It has Key offset partnership with Dassault Aviation for 36 Rafael Aircraft worth Rs 30,000 crore making it the largest offset contract in India
  • Scope includes performance based logistics for 50 years – Maintenance, Repair, Overhaul and Upgrades
  • The life cycle opportunity is estimated at Rs 1 Lakh crore over 50 years
  • Dassault has a long history with the IAF – Mirage 2000, a Frontline fighter aircraft
  • Project to be executed at MIHAN SEZ, Nagpur which has fully functional international airport
  • Scope for ‘Make in India’ for future IAF and Navy orders
  • Requirement for additional 600 Fighter Aircraft over next 20 years valued at Rs 3.6 lakh crore

This leads to the rise of questions like..

  1. Is the National Security has been jeopardized by handing over the project to someone with no experience?
  2. Why was the deal that adds a huge burden to the national exchequer made, when it could have been done at a much less cost?
  3. Why is the government concealing and lying and changing statements from time to time. Is there anything fishy?

Latest Update