The Rafale Deal: Alleged Corruption, Controversy, and Concealment

The Nation witnessed 5 of the Rafale fighter jets landing at the Ambala airbase on the afternoon of 29 July, 2020. A cause to allegedly boost the capabilities of the Indian Air Force as iterated by the Prime Minister as well as the Defence Minister, has many unexplored aspects to itself.

Backdrop of the Rafale Deal

The inception of the Rafale deal points to 2012, the victory of the Medium Multi-Role Combat Aircraft (MMRCA) Competition by Dassault Rafale, a French twin-engine, multi role fighter aircraft, manufactured by Dassault Aviation. The first 18 of the jets were to be manufactured by Dassault Aviation. While the remaining 108 aircrafts were to be manufactured under license by Hindustan Aeronautics Limited (HAL). However, with technological assistance from Dassault.

Due to disagreements, the deal kept dragging on. It went on and off till the year 2015 when the Prime Minister announced that India would acquire 36 fully built Rafales. The Government cited critical operational necessities as the reason. Finally, in 2016, India and France entered into a Memorandum of Understanding (MoU). Following which, an Inter-Governmental Agreement (IGA) was signed for the acquisition of 36 aircraft. The Agreement was signed following clearance from the Indian Cabinet Committee on Security.

The Rafale Controversy

The political controversy revolving around the Rafale deal started in 2017. In essence, with Rahul Gandhi raising the allegations of price escalation and favouritism towards Reliance Defence Limited. However, the Former Defence Minister had justified the costs. With the reasoning that in most cases, the cost of equipments require to make the aircraft ready for combat, overshadows the original costs. In December of the same year, Nirmala Sitharaman justified the costs due to difference in deliverables.

In 2018, the demand to make the details of the agreement was on the rise. As a result, the then Defence Minister said that the agreement was classified under a Security Agreement. Mr. Arun Jaitley also defended the stance of the Government. On the other hand, Rahul Gandhi cited various instances under the UPA Government where details of Defence Agreements were disclosed. His point was supported by the Communist Party of India (Marxist) and the Aam Aadmi Party.

The allegations were mainly based on Price Escalation and Favouritism. Congress leaders Ghulam Nabi Azad and former State Defence Minister, Jitendra Singh took into consideration Dassault’s annual report. They observed that Egypt and Qatar paid 1319 Crores per aircraft, while India paid 1,670 Crores. Also, acquiring 36 aircrafts instead of the Original 126 stood as a threat to the National Security of the Country.

Investigative Reports

The Hindu, in its investigative reports, provided the excerpts from the original agreement. It said that the Agreement provided for many components superior to those in the original deal. With an emphasis on the weapons package. It reported that the lack of bank guarantees from France made the cost of the deal by the NDA Government increase by 246.11 million i.e 1962 crores in comparison with the deal which UPA-I had struck due to bank guarantees.

The Role of Indian Negotiating Team (INT)

The Report also stated that the seven members Indian Negotiating Team (INT) submitted its final report to the Ministry of Defence. The members estimated 4,574 Crores to be the cost of loading bank guarantees. This made the earlier deal signed by the UPA Government in 2016 less expensive.

The INT even explained how it arrived at the 574 Mn. Euros figure, i.e 4,574 crores by computing on an annual bank commission rate of 2 percent, including confirmation charges by an Indian Bank, as communicated by SBI on 2 March, 2016. According to the INT, the Indian negotiators had urged the French to provide bank guarantees repeatedly.

The Ministries

Even the Ministry of Law and Justice advised that India should procure government or sovereign guarantees as a legal safeguard from France. In view of the contract involving huge payouts value of procurement price before actual delivery of supplies and services, which de facto meant advance payment. The question of Bank Guarantees is essential as India was to make 60 percent of payments in advance.

Further, the report goes into the parallel negotiations entered into by the Prime Minister’s Office and the National Security Adviser on the Rafale Deal, unknown to the INT. It referred to a dissent note which protested against such parallel discussions by the PMO.

We may advise PMO that any officers who are not part of Indian Negotiation Team may refrain from having parallel parlays with the officers of the French Goverment.

– THE HINDU, QUOTING THE DISSENT NOTE BY THE MINISTRY OF DEFENCE

The 3 investigative reports published by the Hindu, all talked about how such parallel negotiations had weakened the negotiating position of MoD and Indian Negotiating Team. The report claims that the decision to buy 36 jets instead of 126 led to an increase in price of each jet by 41%.

Supreme Court Case

In 2018, the Apex Court heard a public write petition that sought cancellation of the agreement. The cause of such cancellation revolved around corruption. Kapil Sibal, provided the stance of the Congress that it would wait until required documentation is acquired by them. Surprisingly, the Court asked the Government to provide the details of the decision making process in a sealed envelope. In order to maintain confidentiality.

In December 2018, the Court Dismissed all petitions probing into the irregularities of the deal. The Apex Court gave a clean chit to the Government on decision making, pricing and selection of Indian offset partner.

Adequate military strength and capability to discourage and withstand external aggression and to protect the sovereignty and integrity of India, undoubtedly, is a matter of utmost concern for the nation. The empowerment of defence forces with adequate technology and material support is, therefore, a matter of vital importance.

-FORMER CJI RANJAN GOGOI

This decision invited criticism and a lot of pleas as regards the validity of the verdict. Many petitions were filed before the court. Especially by the Congress that demanded the formation of a Joint Parliamentary Committee for the same. In November 2019, all such petitions were dismissed by the Court and its previous decision was upheld stating that no irregularities or corruption have been found in the deal.

Once again, the Media of the country has to choose between exposing the fallacies caused by the Government or to not receive Skepticism. The Director of the Hindu Publishing Group, Mr. N. Ram, in a recent interview stated that even though the Hindu received a hit after its investigative reports, they won’t back down from promoting independent journalism.

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Nikita Singh Gautam
I'm a Law student from Vivekananda Institute of Professional Studies. I'm here to learn more about this world, as are you. I have an inclination towards the field of Criminal Law. Other than that, poetry and photography have always intrigued me.