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EXPLAINED : THE RAFALE DEAL AND THE CONTROVERSY INVOLVED


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WHAT IS THE RAFALE DEAL ALL ABOUT?


In 2016, the Narendra Modi government signed an inter-governmental deal with France in 2016 for the sale of 36 Rafale medium multi-role combat aircraft (MMRCA). The deal is worth 7.87 billion euros i.e., Rs 59,000 crore at 2016's conversion rate.

CHRONOLOGY OF EVENTS

  • Based on the demand by the IAF in 2007, the UPA government released tenders for 126 MMRCA fighters.
  • A French company, Dassault Aviation in January 2012, made the lowest bids for their aircraft Rafale. Accordingly, 126 jets were required, out of which 18 fighters were to be imported in a fly-away condition. 
  • Hindustan Aeronautics Ltd (HAL) was supposed to manufacture the remaining 108 jets with assistance from Dassault.
  • In 2014, a workshare agreement was signed between HAL and Dassault. Negotiations were carried out over various components of the deal including pricing, technology, weapons system, customisation and maintenance.

  • The deal was never finalised. The Congress party claims that it had negotiated a deal with the price of Rs 526.1 crore per jet but whether Dassault agreed to deliver the jets with India-specific requirements in a given timeline could not be known because this UPA deal never went through.
  • In April 2015, after the Prime Minister Narendra Modi's visit to Paris  government announced its decision to buy 36 Rafale fighters in a flyaway condition, as per the important operational requirements of the IAF. The defence ministry officially withdrew the 126 aircraft deal tender in June.
  • In January 2016, when French President Fran├žois Hollande visited India on the occasion of Republic Day, a MoU was signed between India and France on the purchase of Rafale jets.
  • In 2016, India and France signed the final deal for 36 Rafale jets for €7.87 billion i.e., approximately Rs 59,000 crore according to which the delivery of jets would start from September 2018.
  • In October 2016, business tycoon Anil Ambani's Reliance Defence and Dassault Aviation announced a joint venture under which Dassault was mandated to make compensation investments (offsets) in India worth 50% of the value of the purchase.


  • In 2018, the first real blow to the Centre came when French publication Mediapart interviewed former French president Francois Hollande revealed that he had no choice in selecting the Indian offset partner and the name of Reliance was given by the Indian side.
  • This interview intensified the controversy surrounding the deal. India's Ministry of Defence issued statements reiterating that neither of the two governments was involved in the commercial decision. 
  • Dassault Aviation issued a statement claiming it was Dassault's decision to choose Reliance and it had signed similar contracts with several other companies.
  • The Congress blamed the Modi government for signing the contract with France at a much higher price than negotiated during the UPA rule. Following this, Congress leader Rahul Gandhi along with other Opposition leaders demanded that the government must reveal the price of Rafale. 
  • The government rejected the demand arguing that the price disclosure is not possible for the deal being confidential. Rahul Gandhi claimed that he had been told "personally" by former French President Francois Hollande that the Modi government could reveal the price of Rafale without causing any effect on the defence deal.
  • Four separate petitions filed before the Supreme Court which raised questions regarding 
    • The pricing involved; 
    • Choice of Reliance as the offset partner, 
    • The process followed in finalisation of the Rafale deal. 


  • A bench headed by CJI Ranjan Gogoi reserved verdict in the case on November 14. The apex court noted that the pricing details of Rafale jets could only be discussed after it decides on whether to make it public
  • During the arguments regarding the above mentioned questions, the Centre had filed details of the pricing and the process followed during the deal in a sealed cover before the court, and had claimed that the details of the deal were being kept secret "in the national interest".
  • On December 14 the SC noted that it found nothing wrong with the Rafale deal. According to a bench headed by CJI Ranjan Gogoi the matter had been studied "extensively" and was  "satisfied that there is no occasion to doubt the process [of signing the Rafale deal]"
  • The SC, however, also opined that the Rafale deal process was perfectly fine and dismissed all PILs that demanded a court-monitored probe into it and it was not its job to examine the pricing of the Rafale jets.
  • Now, it has been decided that the first batch of Rafale in India is expected to arrive by the end of April 2020.


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