This story is from September 23, 2018

Rafale makers, French govt rebut ex-president Hollande

Hollande himself seemed more circumspect a day after his remarks set off a political storm. Asked if India had put pressure on Reliance and Dassault to work together, Hollande told international news agency AFP that he was unaware and “only Dassault can comment on this”.
Rafale makers, French govt rebut ex-president Hollande
Key Highlights
  • Only Dassault can comment on this: Ex-French president Hollande, when asked if India had put pressure on Reliance and Dassault to work together
  • Dassault Aviation has decided to make a partnership with India’s Reliance Group. This is Dassault’s choice: CEO Eric Trappier in an April 2018 interview
NEW DELHI: The makers of Rafale fighter jets Dassault Aviation and the French government on Saturday rebutted former French president François Hollande’s claim that the Indian government had thrust industrialist Anil Ambani’s Reliance Defence as an offsets partner in the defence contract.
The Centre also denied it had any role in the selection of Reliance Defence even as Hollande himself seemed more circumspect a day after his remarks set off a political storm.
Asked if India had put pressure on Reliance and Dassault to work together, Hollande told international news agency AFP that he was unaware and “only Dassault can comment on this”. He also said France “did not choose Reliance in any way”.
However, according to an Indian media house, Hollande’s office in France told the TV channel he stood by his statement that the Indian government insisted on Reliance Defence as “service provider” to Dassault Aviation.
In its statement, Dassault Aviation said, “In accordance with the policy of Make in India, Dassault Aviation has decided to make a partnership with India’s Reliance Group. This is Dassault’s choice, as CEO Eric Trappier had explained in an interview published on April 17, 2018.”
The French government statement said, “The inter-governmental agreement signed on 23 September, 2016, between the French and Indian governments for supply to India of 36 Rafale aircraft covers only the obligations of the French government to ensure the delivery and quality of the equipment.”
The Indian defence ministry dismissed the controversy as “unnecessary”, sticking to its stand that Dassault Aviation is yet to officially inform it of the different offsets partners in the Rs 59,000 crore contract for 36 Rafales. Under the contract, the French companies involved must plough back 50% of the contract value to India as offsets or re-investments.

“As per offsets guidelines, the vendor (Dassault) is to provide the details of the offset partners either at the time of seeking offset credits or one year prior to discharge of offset obligations, which in this case will be due from 2020,” it said.
MoD sought to raise a question over Hollande’s statement by saying that “the French media had raised issues of conflict of interest involving persons close to the former President”, alluding to Anil Ambani’s Reliance Entertainment’s deal to help finance a film with Hollande’s partner and actor Julie Gayet. “The reported statement perhaps need to be seen in its full context,” it said.
The MoD also said Dassault, within two weeks of being declared L-1 (lowest bidder) in early 2012 in the original MMRCA(medium multi-role combat aircraft) project to acquire 126 Rafales being negotiated by the previous UPA regime, had entered into a partnership with Reliance Industries in the defence sector. But it did not mention that it was actually Mukesh Ambani’s Reliance conglomerate, and not his younger brother Anil Ambani’s Reliance Defence, that had inked the MoU with Dassault. The MoU had later lapsed and the MMRCA project, under which the first 18 Rafales were to come in “a flyaway condition” from France with the remaining 108 to be manufactured under licence by defence PSU Hindustan Aeronautics, was also scrapped by the NDA government.
The French government, on its part, said it was “in no manner involved” in the choice of Indian industrial partners which have been, or are being, selected by the French companies involved in the deal. “French companies have the full freedom to choose the Indian partner companies that they consider to be the most relevant, and then present for the Indian government’s approval the offsets projects that they wish to execute with their local partners,” it said.
Dassault said the joint venture Dassault Reliance Aerospace Ltd was created in February 2017, with a plant being built in Nagpur for manufacturing parts of Rafale aircraft.
“The Nagpur site was chosen because of the availability of land with direct access to an airport runway, an essential condition of aeronautical activities. Other partnerships have been signed with other companies like BTSL, DEFSYS, Kinetic, Mahindra, Maini, Samtel. Negotiations are ongoing with hundred-odd other potential partners,” it added.
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