Rafale controversy: France, Dassault Aviation contradict Hollande on Indian partners

The French government and Rafale manufacturer Dassault Aviation have rejected former French President Francois Hollande’s claim that the Indian government had a role in selecting Reliance Defence as an Indian partner for the fighter jet deal.

Hollande was quoted by a French website as saying that the Indian government had suggested Reliance Defence as the Indian partner for Dassault’s offset obligations under the Rafale agreement.

“We did not have a say in this,” Hollande was quoted as saying. He reportedly claimed that the Indian government had proposed the private group and that Dassault subsequently negotiated with Anil Ambani’s Reliance Group.

The French government, however, issued a statement late Friday making it clear that it was not involved in the selection of Indian industrial partners by French companies.

“The French government is in no manner involved in the choice of Indian industrial partners,” the statement said, adding that French companies had the freedom to select Indian partners they considered suitable under India’s defence procurement framework.

The government also said that French companies were responsible for presenting their proposed offset projects to Indian authorities for approval in accordance with the applicable procurement rules.

Dassault Aviation separately issued a statement defending its decision to partner with Reliance Group. The company said the offset agreement was being implemented under India's Defence Procurement Procedure (DPP) 2016 and the broader Make in India policy.

“Dassault Aviation has decided to make a partnership with India's Reliance Group. This is Dassault Aviation's choice,” the French aircraft manufacturer said.

The partnership resulted in the creation of Dassault Reliance Aerospace Ltd (DRAL) in February 2017, a joint venture between Dassault Aviation and Reliance Group.

The controversy centres on the offset component of the Rafale agreement. Under India's defence procurement rules, foreign defence suppliers can be required to invest a portion of the contract value in India's defence and aerospace sector through approved offset projects. The selection of private Indian companies for such partnerships became a major political issue surrounding the Rafale deal.

India's agreement with France for 36 Rafale fighter jets was announced by Prime Minister Narendra Modi in 2015 and formally signed in 2016.

The deal replaced an earlier procurement process initiated by the UPA government for 126 Rafale aircraft. Under that proposal, 18 jets were to be purchased in flyaway condition, while the remaining 108 were to be manufactured in India by Hindustan Aeronautics Limited (HAL) under licence.

The Narendra Modi government has consistently maintained that it did not nominate Reliance as Dassault’s offset partner and that the French company independently selected its Indian business partner.

The conflicting statements from Hollande, the French government and Dassault therefore brought the question of who selected the Indian offset partner back into the spotlight, adding another layer to the long-running political debate over the Rafale procurement.