Ex French President Francois Hollande had told a newspaper that the French government had no say in the offset partner for the Rafale deal.

Rafale row Centre reacts says it played no role in the selection of Reliance
news Controversy Saturday, September 22, 2018 - 18:50

The Defence Ministry on Saturday issued a clarification on the ongoing controversy that broke out over former French President Francois Hollande's remark that the Indian government suggested Reliance Defence for the Rafale deal and the French government had no say in the matter. Former French President Francois Hollande was quoted by French news website ‘Mediapart’ saying that the Indian government suggested Anil Ambani’s Reliance Defence in the Rafale deal and the French government had no say in the matter.

“The Government has stated earlier and again reiterates that it had no role in the selection of Reliance Defence as the Offset partner,” the Defence Ministry said in a press release. In the statement, the Defence Ministry explains the offset clause, stating that to leverage its huge arms imports in order to develop a strong indigenous industry, a flow-back arrangement is made in the defence contracts –  widely known as offsets – and constitutes a certain percentage of the contract value.

The statement adds that as per Defence Offset Guidelines, the foreign Original Equipment Manufacturer (OEM) is free to select any Indian company as its offset partner.

“It has been reported that a JV (Joint Venture) between Reliance Defence and Dassault Aviation came into being in February 2017. This is a purely commercial arrangement between two private companies. Incidentally, media reports of February 2012 suggest that Dassault Aviation, within two weeks of being declared the lowest bidder for procurement of 126 aircraft by the previous Government, had entered into a pact for partnership with Reliance Industries in Defence sector,” the Defence Ministry clarified.

The statement further added that the manufacturing company, Dassault Aviation, too, released a statement that it is negotiating with hundred-odd companies and is bound to give details of the partners only later.

“As per the guidelines, the vendor is to provide the details of the offset partners either at the time of seeking offset credit or one year prior to discharge of offset obligation, which in this case will be due from 2020. In view of above, it is once again reiterated that the Government of India has no role in the selection of Indian Offset partner which is a commercial decision of the OEM (original equipment manufacturer),” the statement concluded.

The Opposition in India, led by the Congress, has alleged that the Anil Ambani-firm Reliance Defence was favoured in the Rs 30,000 crore offsets contract at the cost of state-owned Hindustan Aeronautics Ltd (HAL), despite the private firm having no prior experience in aerospace manufacturing.

Earlier on Saturday Home Minister Rajnath Singh dismissed the allegations of the Opposition over the Rafale deal.

"On the statement of the former France President, which is being discussed, the Defence Ministry has issued a statement saying that it is being verified. I think all the allegations were false, are false and will remain false," he told the media.

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