WHAT IS THE Rafale Deal ALL ABOUT?

Rafale deal is a defence agreement between the Indian Government and the French Government. It was for the for the acquirement of aircraft for the purpose of air-to-air and air-to-ground attack of the same sortie. This proposal of Rafale aircrafts was considered over the competitors from the USA, Europe, and Russia. It started under the then National Democratic Alliance (NDA) of late Prime Minister Atal Bihari Vajpayee.

In 2012, the Indian Air Force (IAF) required new aircrafts due to the aging squadrons. The requirement was of  a minimum of 42 fighter squadrons to maintain ideal potentiality. But between 2000-2012, the squadron strength came down to 36 because of obsolescence.

The original proposal was for the procurement of 126 Mirage-2000 jets to replace the MiG-21s in service which was later converted to 126 Medium Multi-Role Combat Aircrafts (MMRCA) under the Vajpayee government. However, the Request for Proposal (RFP) for the same was issued in 2007 under the United Progressive Alliance (UPA).

The airforce had to choose amongst Boeing Super Hornet, Lockheed Martin F-16IN Super Viper, RAC MiG MiG-35, Saab Gripen C, the Eurofighter Typhoon and the Rafale.

The IAF finally narrowed down on both Eurofighter Typhoon and the Rafale aircrafts as they met their technical evaluation and the flight evaluation criteria in 2011. In January 2012, Rafale became the lowest bidder or the L-1 bidder after which contract negotiations began with the manufacturers Dassault aviation the same year.

According to the deal, 126 Rafale jet fighter was to be purchased. 18 of them were to be bought off-the-shelf. The remaining 108 of them were to be license manufactured in India by the Hindustan Aeronautical Limited (HAL), Bengaluru.

Now the controversy arose when the UPA claimed that the deal which they cracked was much better than NDA.

On the other hand, the government claims that the deal had not been formalized by the previous government. Also, the contract had a lot of shortcomings which had it been finalized would have thwarted the deal due to increased cost by manifolds.

The most important aspect of this deal is the cost and transfer of technology.

Request for proposal and the medium multi-role combat aircraft was withdrawn in June 2015 as contract negotiation had reached an impasse. Transfer of technology was not cost effective.

WHAT WAS THE UPA DEAL FOR THE RAFALE AIRCRAFTS?

Well, there was as such no agreement between the Indian and the French government signed up for the same. This is because of the various issues which arose because of which there was no consensus between the two parties.

WHAT ARE THE REASONS FOR A CONTROVERSY?

The most important aspect is the Request for Proposal, cost and the Transfer of Technology which remained incomplete even after 2 years till 2014.

Transfer of Technology (ToT) – 

Transfer of Technology was the prima facie reason because of which the agreement could not be built upon in the UPA regime.

Dassault aviation was not ready to take the responsibility on the quality control of 108 aircraft which have to be built upon by HAL, Bengaluru. Also, both the HAL and Dassault have since been giving a varying statement on the hours of labour for production purpose. While Dassault allocated 3 crore man hours. HAL has given an approximation which is higher than the original figure by 3 times. This was increasing the cost by several times.

There was no agreement on the transfer of technology previously. What was there was the license manufacturing technology?

It was the same reason because of which the defense minister rebutted on the allegation put by Congress by stating – “the earlier contract was based on the procurement of 126 jets. On the other hand, this new contract is on the procurement of 36 off the shelf purchased of jets. So, the ToT is not economically feasible.”

DID THE MODI GOVERNMENT CRACK THE DEAL AT A HIGHER COST?

The most controversial aspect of the deal is regarding the cost at which the contract has been finalised. While the UPA claims that the NDA government has signed a deal for approximately 1570.8 crore which is 300 percent more than the price at which UPA negotiated.

What is not being highlighted is the fact that there has been a various improvement in the design and the specification of the planes. Ability to take off from a high-altitude station such as Leh. Also, an upgradation to the search track sensor and a potential electronic jammer pods are a few of them which have been changed as per the Indian requirement.

Also, not to mention that the cost of the improvement which has been established is equal to the 126 aircrafts. This is because this is a one-time research and development cost.

The basis with which the Congress is pointing a finger towards the government is that the new deal is actually a huge blow to the Prime Minister’s dream of Make in India. Also, the fact that the Congress is missing is that the new deal is with frontline technology, more efficiency, and a performance guarantee clause.

The IAF is also getting Meteor missiles which are considered as the most advanced in the world. The present government indeed has an upper edge at which the contract has been settled.

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Also, to reduce the cost, European inflation has been capped at 3.5% so that in case the inflation goes down, the cost will also go down as the payment is being made in installments. Under the current agreement, the 36 Rafale procurement offset proposal supports the ‘Make in India’ initiative of the Indian Government through Article 12 of the Inter-Governmental Agreement (IGA). It states that the French Party will facilitate the implementation of ‘Make in India’ by the industrial supplier notably through offsets for 50% value of the supplied protocol.

The offset proposal also includes provisions for transfer of sophisticated design technology which is meaningfully superior to the licensed manufacturing on offer in the earlier 126 MMRCA nonstarter. These critical design technologies are presently under discussion between the two governments.

ALL YOU NEED TO KNOW ABOUT THE SECRECY IN THE RAFALE DEAL

For a long period of time, Rahul Gandhi has been alleging that the government is not revealing the exact breakdown n of eh pricing details of the deal which is being made between the 2 governments. However, the fact remains that an approximate figure of the deal has been present in the parliament.

Providing information about the various details of the customisations and the weapon systems specially designed as per Indian requirement if revealed would hinder the national security of the country. Also, it would impact the military preparations regarding the same.

Also, the disclosure of this confidential information is not allowed due to a confidentiality provision in the bilateral agreement being signed by both the government in 2008.

WAS ALL THE PROCUREMENT PROCEDURE FOLLOWED ON RAFALE DEAL?

One of the most important questions which remains unanswered is whether all the procedure for the procurement of the aircrafts followed with the clearance from the Cabinet Committee on Security (CCS) before the announcement or not.

To back it up was when the defence minister Nirmala Sitharaman addressed the media that all the due process was followed regarding the same.

The defence ministry instead had in a hush-hush manner stated that all due process for the acquisition of the Rafale deal was made in accordance with Defence Procurement procedure. Although it might be factually correct for the aspects including mandating, conducting and monitoring of negotiations and seeking all necessary approvals, including that of the Cabinet Committee on Security, before entering into the IGA, it may be partly true.

According to the paragraph 71 of Defence Procurement Procedure,2006 it clearly states that-

“There may be occasions when procurements would have to be done from friendly
foreign countries…mutually agreed provisions by the Governments of both the countries. Such procurements will be done based on an Inter-Governmental Agreement (IGA) after clearance from CFA….”

However, the paragraph 72 and 73 of the same Act respectively clearly mentions that-

“In cases of large value acquisition and especially that requiring product support over a
long period of time it may be advisable to enter into a separate IGA……expected to safeguard the interests of the Govt of India and should also provide for assistance of the foreign Govt in case the contract(s) runs into an unforeseen problem.”

“In certain acquisition cases… These considerations may also dictate the selection of particular equipment offered by a vendor not necessarily the lowest bidder (L-1). Decisions on all such acquisitions would be taken by the Cabinet Committee on Security (CCS) on the recommendations of the Defence Procurement Board (DPB).”

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Although according to the paragraph 71, the government might be factually correct, however according to the paragraph 72 and 73, the due procedure was not followed as CCS was not consulted and the DPB was not given prior information regarding the same. Also, the IGA was not drafted when the announcement was made with such fanfare. So, the deal is being made along the lines of the procedure, however, the announcement actually bypassed the rules in all manners which may or may not be breaking the laws.

THE CRONYISM RELATED TO RELIANCE 

The involvement of the Prime Minister’s so-called friend has actually raised a lot of eyebrows in the deal. Allegations of cronyism, double-dealing and favouring of the private sector over HAL ha been flying high in the air. So, things need to be put to rest on this issue as well.

Dassault has actually chosen Reliance Defence Ltd to meet its ‘offset’ or export obligation in the contract and the Ministry of Defence has no role in the selection of Indian partners by the foreign vendors.

All planes are being purchased in the fly-away condition. So, neither HAL nor any other company can make it.
As per Defence Procurement Procedure (DPP), the Ministry of Defence has no role in the selection of Indian partners by the foreign vendors. This has been the position right from 2005 when offsets were first introduced in the country.”

ADD-ONS IN THIS DEAL

Well, according to reports, it clearly states that there is a new offset clause because of which the Dassault aviation’s would spend 50% of their earnings in the defence sector of the country. This is something new which was not mentioned in the previous agreement.
This would help the local manufacturers to learn the global technology and prepare them to compete in the international level. They would hence get a business of about 3 billion euros.

Also, the French side has made a 30 percent offset commitment for military aerospace research and development programmes and the rest 20 percent for making components of Rafales here.

The French have also agreed in principle to collaborate on the Kaveri engine which lacks the real power thrust needed to fly the Tejas.

An upgraded Kaveri engine with 90 kN thrust compared to the existing 72 kN can be developed with French cooperation which can eventually be used for Tejas which currently uses an American engine.

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