Two French armament majors Dassault Aviation and MBDA didn’t discharge 30% of their offset obligation as mandated in the Rs 59,000-crore Rafale contract four years after inking an agreement with India to supply 36 fully armed Rafale combat jets, the Comptroller and Auditor General (CAG) informed Parliament on Wednesday.
A press statement issued by the CAG, however, is silent on the more controversial part of the deal — the selection of Indian offset partner.
The Opposition had alleged that Anil Ambani’s Reliance Defence was given undue advantage as the offset partner by the Narendra Modi government.
"In the offset contract relating to 36 Medium Multi-Role Combat Aircraft (MMRCA), the vendors Dassault Aviation and MBDA initially proposed (September 2015) to discharge 30% of their offset obligation by offering high technology to the Defence Research and Development Organisation. The DRDO wanted to obtain technical assistance for the indigenous development of engine (Kaveri) for the Light Combat Aircraft. Till date the vendor has not confirmed the transfer of this technology,” the CAG said in the report.
The audit watchdog cited the Rafale case to demonstrate how some of the foreign vendors made various offset commitments to qualify for the main supply contract, but later were not earnest about fulfilling these commitments.
The Rafale deal, along with three other agreements (two on weapons and the third on offset), was signed on September 23, 2016. The offset obligations were to commence from October 2019.
The deal triggered a huge political controversy in the run-up to Parliamentary elections in 2019 with the Opposition parties pressing corruption charges against the Modi government, notwithstanding the favourable verdict it received from the Supreme Court.
The government had earlier denied having any role in selecting the Indian offset partner. “As per the guidelines, the vendor is to provide the details of offset partners either at the time of seeking offset credit or one year prior to the discharge of offset obligation, which in this case will be due from 2020,” the Defence Ministry had stated in a statement in September 2018.
The ministry response came in the wake of former French President Francois Hollande’s sensational claim that the French side had barely any choice in deciding the Indian offset partner as the Modi government pushed for the Anil Ambani-led company.
Since the second half of 2017, the CAG decided not to release its defence-related reports online on security groups. Each of the CAG reports is, however, placed either in Parliament or in state assemblies.