Dassault Aviation has stated that it freely chose Reliance Industries as its joint venture in India, amid media reports that it did so at the behest of the Narendra Modi government.
In a statement, it notes that to comply with India’s Defence Procurement Procedure, it is required to provide industrial offsets amounting to 50% of the deal.
“In order to deliver some of these offsets, Dassault Aviation has decided to create a joint-venture,” says the company. “Dassault Aviation has freely chosen to make a partnership with India’s Reliance Group. This joint-venture, Dassault Reliance Aerospace Ltd (DRAL), was created February 10, 2017.”
Dassault’s statement, which it terms a “clarification,” comes amid media reports in India that allege the government forced Dassault to work with Reliance Group, which is run by Anil Ambani, reportedly a friend of Modi.
In September, former French president Francois Hollande reportedly said that the Modi government put Reliance forward as Dassault’s partner. After this, allegations against Modi and his Bharatiya Janata Party over the Rafale deal have been playing in Indian media, fuelled by the rival Congress Party.
The allegations received an additional boost with a 10 October report in French online portal Mediapart, which claims to possess an internal company document in which an unnamed Dassault executive states the company was obligated to work with Reliance. It is this report that apparently prompted Dassault’s clarification.
“Other partnerships have been signed with other companies such as BTSL, DEFSYS, Kinetic, Mahindra, Maini, and SAMTEL,” adds Dassault. “Other negotiations are ongoing with a hundred-odd other potential partners.”
DRAL is setting up a factory in Nagpur that will initially produce parts for the Falcon 2000 business jet, but later will produce parts for the Rafale. The company is training an Indian management team at its factory in Biarritz, where Indian workers are also learning its manufacturing techniques.
Air Chief Marshall BS Dhanoa recently described the 2016 decision to obtain the 36 aircraft as an “emergency buy” to shore up India’s falling number of fighter squadrons. The nation has 33 combat squadrons against an authorised strength of 42.5.
The Rafale had been selected in the Medium Multi-Role Combat Aircraft (MMRCA) competition, but this deal fell through in 2015 amid disagreements between Dassault and Hindustan Aeronautics (HAL), which would build 108 of the 126 aircraft that the competition called for.
Dassault, for its part, appears to have desired Reliance as a partner for some years. After winning the MMRCA deal in 2012, it initially wanted to build the fighters locally with Reliance. This put it odds with HAL and the terms of the MMRCA competition.