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Business News/ Opinion / Online-views/  Rafale deal is not the real issue, defence planning is

Rafale deal is not the real issue, defence planning is

Political parties are only interested in unearthing 'scams' to target each other while more important questions remain unaddressed

Illustration: Jayachandran/MintPremium
Illustration: Jayachandran/Mint

The last time India had a government with a single party majority in the Lok Sabha, it was ousted on the back of a formidable political campaign that centred around a defence deal. The leader of the Congress party, Rahul Gandhi, is looking for another defence deal that could provide an opening for his ascent to power in 2019. Gandhi wants to exploit the Narendra Modi government’s Rafale deal the way V.P. Singh milked the Bofors deal in 1989.

During Friday’s no-confidence motion in Parliament, Gandhi raked up the Rafale deal once again. His allegations against the government are three-fold: a) large-scale cost inflation in the deal after the United Progressive Alliance (UPA) government demitted office; b) non-existence of a secrecy pact between the governments of India and France as the defence minister Nirmala Sitharaman has been claiming; and c) cronyism in awarding the offset contracts under the deal. It is time to look at these charges one by one.

The charge of a disproportionate cost inflation of the deal is bogus. The UPA government had not arrived at any final price. The number that goes around—roughly 5.2 billion per plane—and the one that Gandhi quoted was the price of the basic hardware without the weapons package and other India-specific additions. The government has claimed that if the in-built cost escalation formula and the exchange rate variations over time are factored in, the deal negotiated in 2016 is much better. One can probably find flaws with the government’s argument, but definitely the gap between the price of a bare-bone Rafale in 2007 and 2016 is not enough to make half a compelling case for a scam.

The fact that there exists a secrecy pact between the two governments was confirmed by both the governments in New Delhi as well as Paris. And Sitharaman clarified that the pact was signed in 2008—during the tenure of the UPA government. Gandhi’s claim that French President Emmanuel Macron himself informed him of the absence of any such secrecy pact falls flat on the face. Gandhi could have asked whether commercial details of the purchase fall within the ambit of the secrecy pact. We do not know but can make an educated guess.

It is obvious that protecting the price-related information is a bigger concern for Dassault Aviation—manufacture of Rafale aircraft—than it is for the Indian government. Rafale is a product in a very competitive market. Besides, discriminatory pricing is a norm in the defence market. Why should India, though, agree to keep the price breakdown secret in order to benefit Dassault?

The answer could lie in the prospective use of 36 Rafales India has purchased. The 2007 MMRCA (medium multi-role combat aircraft) tender involved 126 aircraft (18 to be purchased in flyaway condition and 108 of them to be built in India). In 2015, the government decided to scrap the MMRCA tender and buy 36 Rafales in flyaway condition in a direct government-to-government agreement. Justifying the decision, the then defence minister Manohar Parrikar said: “It is a strategic purchase and should never have gone through an RFP (request for proposals)." Many experts think that India is planning to use Rafale aircraft as a nuclear weapon delivery platform—a task of sensitive nature where it would require continued cooperation from the French government and Dassault Aviation. This definitely gives Dassault some bargaining power vis-à-vis the Indian government.

A nuclear role, however, is not necessary for the Indian government to hide commercial details of a defence purchase. There have been previous instances—including during the time of UPA government (—when the Indian government simply refused to disclose commercial details on grounds of national security. Such a culture of secrecy is against the spirit of democracy; India needs to move towards greater transparency in matters of defence procurement. It is this culture of secrecy that encourages scams and makes people suspicious even when there is no scam.

Finally, why was Reliance Defence chosen over Hindustan Aeronautics Ltd as the India partner for offset contract under the Rafale deal? This is the easiest charge to answer: Choosing the India partner is Dassault’s prerogative.

This entire saga that began with the MMRCA tender and has continued ever since raises many questions about India’s defence procurement process. Was the Modi government the one which figured a nuclear role for Rafale? Or was such a role also envisioned by the UPA government? If it was, then why did the Modi government decide to scrap the MMRCA tender and settle for just 36 Rafales? Moreover, did India require 126 aircraft so as to chase the expensive dream of fighting a two-front war? Earlier this year, the government’s plan of producing single-engine fighter planes with foreign partners was also abruptly withdrawn. It is unclear how many fighter squadrons India realistically needs and how exactly it intends to reach there.

The culture of secrecy that pervades defence procurement and defence planning in India means that there are no answers to these very important questions. The political parties, meanwhile, are content with finding “scams" to target each other. Gandhi is happy to drag the president of a friendly foreign country in his domestic political fight. He has no appetite, however, for asking more penetrating questions on India’s defence planning.

Are there reasons to suspect a scam in the Rafale deal? Tell us at

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Published: 23 Jul 2018, 08:17 PM IST
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