News outlet in France quoted former French President Francois Hollande as saying that New Delhi had influenced the choice of a local partner for the 2016 purchase of 36 Rafale fighter jets from Dassault Aviation, worth around $8.7 billion.
Opposition parties have challenged Modi’s government in recent months over the choice of billionaire Indian businessman Anil Ambani’s Reliance Defense as Dassault’s local partner rather than a state-run manufacturer with decades of experience in the aviation industry, insisting that the prime minister had overpaid for the warplanes and failed to be transparent.
Hollande, who inked the military deal during his presidential tenure, was quoted on Friday by French Mediapart news service as emphasizing that the New Delhi government had pressured Dassault to choose Reliance Defense, saying: “We had no choice. We took the interlocutor that was given to us.”
The report triggered a political storm in India with president of the main opposition Congress Party, Rahul Gandhi, alleging in a tweet: “The PM personally negotiated and changed the Rafale deal behind closed doors. Thanks to François Hollande, we now know he personally delivered a deal worth billions of dollars to …Anil Ambani. The PM has betrayed India.”
Under Indian defense procurement regulations, a foreign firm must invest at least 30 percent of the contract in India to help it build up its manufacturing base and avert imports.
Based on the rule, Dassault picked Reliance and not Hindustan Aeronautics Limited, the huge state-run company that has been manufacturing aircraft for decades, most of them Russian under license.
While Modi’s office did not respond to inquiries about the case, India’s Defense Ministry said in a tweeted statement that neither the French nor Indian government were involved in the matter.
“The report referring to fmr French president Mr. Hollande’s statement that GoI (government of India) insisted upon a particular firm as offset partner for the Dassault Aviation in Rafale is being verified,” it read. “It is reiterated that neither GoI nor French Govt had any say in the commercial decision.”
The French Foreign Ministry also published a statement saying government officials were not involved in the choice of Indian industrial partners for the deal.
“The French government is in no way involved in the choice of the Indian industrial partners which have been, are or will be, chosen by French companies,” the statement added.
The military deal was expected to deepen strategic ties with France, and the company itself has hoped it would lead to a larger order for combat aircraft that the Indian air force demands to counter what it calls threat from its neighbors.