Dummies Guide to Rafale Deal: Timeline, Facts & Data

By Mass Communication Specialist 2nd Class Rafael Figueroa Medina [Public domain], via Wikimedia Commons

1. UPA signed the Rafale deal in 2012:

Dassault Aviation agreed to sell its aircraft @ Rs 54,000 Crore for 126 Jets. Out of this 18 fighter jets were to be supplied by Dassault in flyaway condition and rest 108 were to be manufactured in India by HAL under technology transfer agreement. In the same agreement, Dassault was to invest half of the total operational amount in India. Each Jet was to cost around Rs 530 crore to India. 

2. Reliance Defence enters into the deal:

On 24 June 2016, the BJP government issued a policy that allowed 49% FDI in defense sector without any prior approval under the automatic route. No approvals from the CCS or Union Cabinet was mandated under the automatic route for the formation of the joint venture company. Reliance Defence Ltd. was a beneficiary of this policy.

It entered into a contract with French Company Dassault Aviation, the maker of Rafale Jet. Consequently, the same company which was providing India 126 Rafale fighter jets for Rs. 54,000 Crore earlier would now be supplying just 36 Jets to India at Rs 58,000 Crore. No transfer of technology here and no obligation upon Dassault to invest half of this amount in India. 

3. The Rafale Deal Goes Up by Rs. 30,000 Crore

The cost of this 36 Jets must have been around Rs. 19000 Crore (as per the previous contract under UPA regime). That means, when Reliance Defence enters into a contract, the deal goes up by Rs 39,000 Crore. Where is that Rs 39,000 Crore going? What is Reliance Defence actually doing in this contract if it is not making any of those jets in India? The baniya is making money, not Jets. 

4. The Dassault and Reliance Joint Venture

Dassault Aviation will now work with Reliance Defence Ltd. for maintenance of jets and future defense production and is no longer obliged to share its technology with HAL (Hindustan Aeronautics Limited). The Govt of India would then purchase these Jets from Reliance. The baniya is getting laddoos from both sides. 

The joint venture between Reliance and Dassault was the biggest-ever Indian defense deal. However, unfortunately, it has not gone through the appropriate process of approval by the cabinet committee on security and FIPB (foreign investment promotion board).

6. Reliance Defence’s another Contract with Russia

Reliance has also entered into a contract with Russia as well. When the PM visited Russia in December 2015, Anil Ambani’s Reliance Defence signed a defense deal with Russian Almaz-Antey, worth $6 billion (approx. 40,000 crores).

A company which started with selling tobacco is entering into Defence deals with countries worth billions of dollars. And no one dares to ask these questions or point fingers at the murky deal. Since we have a chopping government at the helm of affairs. Who’d take the risk?

The article was first published by Farhan Rahman on his Facebook timeline.

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About Farhan Rahman 26 Articles
MA (Sociology), Farhan Rahman has an interesting perspective on everything in general.