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Business News/ Politics / Policy/  Dassault Aviation says partnership with Reliance Group for Rafale was its own choice

Dassault Aviation says partnership with Reliance Group for Rafale was its own choice

French journal had quoted ex-president Francois Hollande as saying Dassault was given no choice but to partner Reliance Group

Former French President François Hollande. Photo: AFPPremium
Former French President François Hollande. Photo: AFP

New Delhi: French aircraft maker Dassault Aviation SA has said its partnership with Anil Ambani’s Reliance Group for making parts of Falcon and Rafale aircraft was Dassault Aviation’s choice. The statement from Dassault backs the Indian government’s position that the joint venture between the two groups was the result of a commercial decision between the businesses and governments had no role in that.

The controversy over India’s purchase of 36 Rafale aircraft had taken a new turn on Friday with a French journal quoting former president François Hollande as saying that Dassault Aviation was given no choice but to partner Anil Ambani’s Reliance Group for the offset clause in the deal, according to an ANI report.

Dassault Aviation has clarified that the 2016 contract for 36 Rafale aircraft sale to India was a government to government deal, which provided for a separate contract in which Dassault Aviation committed for making compensation investments (offsets) in India worth half the value of the purchase.

Dassault Reliance Aerospace Ltd (DRAL) has an offset contract of around 30,000 crore for 36 Rafale aircraft. Under an offset policy, foreign companies selling goods to the Indian government or state-run firms are made to source part of the supplies locally.

“This offsets contract is delivered in compliance with the Defence Procurement Procedure (DPP) 2016 regulations. In this framework, and in accordance with the policy of ‘Make in India,’ Dassault Aviation has decided to partner India’s Reliance Group. This is Dassault Aviation’s choice, as CEO Eric Trappier had explained in an interview published in MINT newspaper on April 17, 2018," according to the statement from the French company uploaded on its website on Friday. France is three hours 30 minutes behind Indian time.

Mint had reported on 16 April quoting Trappier that the joint venture was Dassault’s choice, which it will continue with.

Dassault said the joint venture, DRAL, was created in February 2017 and a plant had been built in Nagpur for manufacturing parts for Falcon and Rafale aircraft. The Nagpur site was chosen because of the availability of land with direct access to an airport runway, an essential condition for aeronautic activities, said the statement from the French firm.

Dassault also said it has signed partnerships with other firms too. “Negotiations are ongoing with a hundred-odd other potential partners," the company said. The company was very proud that the Indian authorities had selected the Rafale fighter, it added.

India’s defence ministry had on Friday tweeted that the report referring to former French President Mr Hollande’s statement that the government of India insisted upon a particular firm as offset partner for Dassault Aviation in Rafale was being verified. “It is reiterated that neither the government of India nor the French government had any say in the commercial decision."

Reliance Group did not respond to an email seeking comment.

The purchase of the 36 Rafale jets, slated to be inducted into the Indian Air Force from September 2019, has been in the eye of a storm with the Congress questioning the price and the choice of Reliance as the offset partner.

Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.

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Gireesh Chandra Prasad
Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
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Published: 22 Sep 2018, 10:32 AM IST
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