There are plenty of opinions available regarding the Rafale Deal or Scam(if any), I will solely concentrate to pour all the relevant details, informations and the circumstances, raising certain necessary questions in between in order to give you a brief idea about the whole issue. In a nutshell, this blog will effectively help you to understand this mysterious deal.
So, the first and most important question is:
Where it all started? Why it was so necessary for India to opt for other aircrafts if we had Russian made aircrafts?
The journey started in the year 2000 when the IAF moots proposal for MMRCA to replace MIG-21s (russian made air-craft).The reason behind the above appeal was the worse performance of MIG-21. Earlier,MIG-21s were popularly known as “the flying coffins or the widow maker” because of its mid air blasts or high crash rate. This crash results in huge loss of the government in terms of property, money and mankind. Back in 1999, During the Kargil War India lost 2 MIG-21s (one shot down and other crashed due to engine failure). The others crafts were soon reaching their expiry date. Our defense needed to patch up so, we were in desperate need of Air-crafts.
The success of the French-made Dassaut Mirage 2000 during operation Safed Sagar impressed the Atal Bihari‘s Government and they were happy to help IAF with latest technology in Air Force. This act of French govt. assured a beginning of pleasantry exchanges between the two countries. Fighting against the odds (poverty, funds, legal documents, art-rivals parties) the government issued a tender of 126 Medium Multi Role Combat Aircraft (MMRCA) in 2007. Tender was issued for estimated cost of Rs. 42000 Cr. to Russian MIG-35, Swedish JAS-39,French Rafale, American F-16 Falcon and Eurofighter Typhoon. In 2008, the companies submitted their bids with complete details.
In 2011, Ministry Of Defense (MOD) announces to start discussions with Dassault (Rafale) and EADS (Eurofighter Typhoon). After some negotiations Dassault was shorlisted as they submitted the lowest bids in 2012.
After a decade of discussions and interference finally, a long awaited plan was implemented by the government.
The final call was made and way ahead was very clear but if everything would be so vivid and easy, I won‘t be sitting in my desk gathering all the details to write this article in a beautiful Sunday morning or you wouldn‘t be scrolling and reading this. Anyway let‘s get back to the point again.
The deal was to purchase 126 MMRCA fighters, 18 in fly away (ready to fly) condition and rest will be made in India by HAL through TRANSFER OF TECHNOLOGY. This “Made In India or Transfer of Technology” was one of the key aspect of this deal because, If in any case, the relation between the countries have an deplorable end or the French Company Dassault company closes down, India will made its own aircraft of Rafale quality.
3 March 2014: Dassaut and HAL(Hindustan Aeronautics Ltd.) agreed on a statement that 70% of the work will be done by HAL and the Dassault will complete the rest work. At the end of 2014 the government changed and Narendra Modi became the new PM of country.
25 March 2015: Dassault CEO confirmed that 95% of the paperwork is done, the deal will be sealed soon.
“You can imagine my satisfaction to hear from HAL chairman that we are in agreement for responsibilities.” – Dassault CEO.
8 April 2015: The Foreign Secretary said Indian govt. HAL and Dassault negotiations are still going on.
Around 3 years have passed and the negotiations were still going on, and this take us to our second question:
Why this delay?
Both India and France witnessed national elections and a change in government while the negotiations were under way. Pricing was another factor. Even during the signing of the purchase agreement, both the sides could not reach a conclusion on the financial aspects. According to experts, the price of an aircraft is about Rs. 740 Cr. and India wants them for atleast 20% lesser cost.
THE NEW DEAL
10 April 2015: PM Modi went France and a new deal was announced without any prior informations. In this new deal India scaled down it‘s order from 128 to 36 that too in fly away condition, this act of PM Modi and the origin of all the dispute. In this new deal a joint statement was declared as:
“Aircrafts and associated system and weapons would be determined on same configuration as had been tested and approved by Indian Air Force.” The interpretation of the above statement can be concluded as “the configuration of the air crafts will remain the same in the new deal.” Under the new deal Dassault is not asked to share its technology. The deal was finalised in around 59000 Cr. for 36 jets with 50% Offset Clause.
50% OFFSET CLAUSE: This deal comes with 50% Offset Clause which means, Dassault is bound to invest half amount of total money (around 30,000cr.) in Indian Companies
This 50% of the money was expected to be distributed in Military and Aero Research in India (30%) and Production of Rafale Components in India. Technically it is Dassaults decision to choose their investment companies in India.
25,28 March 2015: Two companies were created Adani Defense System and Reliance Defense Limited.
3 Oct. 2016: Reliance tied up knot with Dassault creating Dassault- Reliance Aerospace. June 2017: According to a Hindu Buisness Line report 21,000 out 0f 30,000 Cr. rupees will be invested in the Joint Venture between Dassault Reliance Aerospace.
A series of questions and allegations flooded the government with an enormous negativity from the opposition parties and their followers. The public was also confused and some questions left them amusing like;
Q.) Did the PM announce deal on his own without keeping defense minister in this loop?
Q.) Why the deal was cancelled between Dassault and HAL? HAL was knocked out from the deal by a new company with no past track record, WHY?
Q.) Why was the old deal called off?
Congress alleged non-transparency in this multi Cr. deal making fun of Made In India.
Modi was alleged to favour Anil Ambani‘s Reliance Company in this deal.
The BJP government maintained silence for a while and the doubts remained unanserwerd.
21 Sept. 2018 : The topic again reached headlines when the French PM Francois Hollande (2012-2017) said Modi has deliberately selected Reliance in the new deal.
In response to the above statement Dassault declared it is their own choice to replace HAL with Reliance. In order to avoid further allegations and negative comments, our Defense Minister Nirmala Sitaraman said we have‘nt suggested any name, Dassault was free to choose their partners.
The Current French Govt. never intervened in the above discussion.
One of the major reason behind the dispute was the difference in Pricing Of Jets in the NEW DEAL. I will put down the numbers so, you would get along and inspect if the allegations were true or not?
OLD DEAL: According to Congress the old deal was about to finalised in this circumstances;
Total Cost of all the planes: 54,000 Cr.
Total No. of planes: 126
Per Plane Cost : 526 cr.
13 April 2015: The Defense Minister Manohar Parikar estimated the project and posted his calculations, according to him
Total Cost : 90,000 Cr.
Total No. of Planes : 126
Per Plane Cost: 714 cr.
THE NEW DEAL : Exceeding all the calculations the new deal brought us a complete new scenario giving rise to certain mis-conceptions. The new deal is based as
Total No. of planes = 36
Per Plane Cost = 1638 Cr.
Total Cost = 59,000 Cr.
This take us to our next question;
What are main reasons for this increase of price?
The reasons behind the sudden increase in price can be
The inflation in this last decade.
In the old deal 18 planes were about to made in France and rest in India but acc. to new deal all the 36 planes will be made in France , this lead us to restrict and shape our comparisons
“ The actual comparisons of cost should be of those 18 planes(which were about to made in France) with the new planes.”
18 Nov. 2016: Ministry of Defense informed the Basic cost of per plane as 670 cr.
Govt. declared basic costs, not mentioning specifically the charges of separate parts of the jets, because of security/ defense reasons.
Speculations and Comparisons will be ongoing till we get actual details of costs and perhaps we will never know that because those details will remain furtive.
5 Feb 2017: Air-force declines RTI seeking details of the deal, saying it‘s confidential. According to the agreement signed, the details will not be disclosed without prior knowledge to both countries due to national security purpose.
This whole chaos have left several individuals perplexed and amusing, imagining as we will get to know this topic more closely.
Now we head towards the final question of this article ;
What is the end result of all this?
OR When will this mysterious deal will be solved?
The end results are pretty clear, we will identify the culprit and this deal will be no longer a mystery for you, all you have to do is read the Court‘s decision in our next blog.
So, Stay tuned!! The Final call! Supreme Court decision‘s..