Rafale Jet deal - How Modi compromised India's national security
Rafale Jet scandal is in the news again, this time because of developments in France. France's PNF, prosecutor office dealing with serious financial/economic offenses, has launched an inquiry to look into corruption surrounding Rafale Jet Deal between Indian Government and French company Dassault aviation. Rafale Jet was a 4th Generation fighter plane which India bought in a 2016 deal with Dassault aviation.
The Rafale Jet deal, signed in 2016, smelt of high corruption due to many discrepancies, violations of India's Defense procurement protocols and last minute changes in the deal. I won't go into all the details and only give a brief summary on this. For more details, the following articles are good read (read 1, 2 & 3) . Since 2005, India was negotiating with various global Defense companies for purchase and development of modern fighter Jets. After various deliberations and negotiations, it was decided by Indian Government under the rule of INC Party at the time to purchase Rafale Jets from Dassault Aviation.
The terms and conditions of original negotiations were like this. After various consultations with Air Force, it was estimated that four squadrons of total 126 fighter jets are required to address the defense requirements and replacing the ageing fleet of old generation fighter jets. The deal between Dassault aviation and Indian Govt was to involve French Govt as a sovereign guarantor. Sovereign guarantee meant a bilateral agreement between India-France where France will give assurance & legal guarantees to Indian Govt that Dassault aviation will come good on delivery of fighter planes on negotiated terms & conditions. The Rafale Jets were purchased on basis of transfer of technology so that India's national Defense company HAL (Hindustan Aeronautics) with form joint consortium to manufacture Rafale Jets in India. 18 jets will be manufactured in France and given to India in ready to fly condition while remaining 108 Jets will be manufactured in India with help of Dassault Engineers so that Indian manufacturers gain technological expertise which will help India in future self sufficiency.
These terms and conditions of Rafale Jet procurement took several years of negotiations and deliberations involving French Government and Dassault. The original deal negotiated by Indian Govt under the INC Party carried over after Modi's BJP came into power in 2014 and talks continued on the same lines under new Defense minister Manohar Parrikar of BJP. But everything changed overnight after a 2015 Modi's state visit to France. The original deal for procurement of Rafale Jets was junked, and entirely a new deal was crafted overnight. The terms and condition of new deal were crafted by PMO (Prime Minister's Office) without following the normal channels of Defense procurement. In fact, various defense procurement rules were amended retrospectively.
The new Deal for Rafale Jet purchase was like this. France was no longer a sovereign guarantor in deal between Indian Govt and Dassault. The order of Rafale fighter Jets was reduced from 126 to only 36. The 'transfer of technology' basis of purchase was junked and all 36 fighter Jets were purchased in ready to fly condition. The HAL-Dassault consortium for joint production of Jets in India and transfer of technology was hence also junked and HAL was removed completely from the picture. A new private player came into the picture by way of offset clause - Reliance Defense. Reliance Defense, newly formed company is owned by Indian Oligarch Anil Ambani close to India's Prime Minister Modi. Anil Ambani is notoriously famous as one of the greatest bank defaulters of India and his bankruptcies, having failed many of his business ventures like in Telecom, Energy, Infrastructure etc. Anil Ambani's newly formed Defense company, having no experience or track record in Defense production & aerospace industry, was assigned a $2.8 Billion maintenance contract by Dassault.
A major point of contention with the new deal made by Modi was pricing of Rafale Jets. The previous deal negotiated for 126 Jets was based on pricing of around Rs 700 crore per Jet (around $93 million as per today's exchange rates) but Modi's new deal inflated the price of Jet to around Rs 1600 crore per jet (around $210 million) more than double the previously negotiated cost. Some defense experts say that India asked for certain additional modifications in fighter jets which may have elevated costs of Jets. Factoring these things, its estimated that under Modi's new Deal, Rafale Jets prices got inflated by around 40%. The actual discrepancy in prices under previous deal and new deal may never be known because all the trade negotiations were done in secrecy. It was demanded by political opposition parties that Modi Govt should disclose all details regarding financial aspect of Rafale deal in the Parliament. But Modi Govt was not interested citing secrecy pact with France.
The new Rafale Deal made by Modi with Dassault was seen as undermining of India's Defense needs and compromising national security. It also smelt of high corruption, handing out of special favors to Modi's close Oligarch and causing major losses to exchequer. The political opposition made a hue & cry over the issue but it didn't reach anywhere. The law enforcement investigating agencies being under the control of Modi turned a blind eye and refused any investigation of the deal. Its rumored that CBI Director Alok Verma was trying to initiate a preliminary inquiry into Rafale issue. He was dismissed in the middle of the night along with disbanding of entire top CBI echelon which created a storm of its own kind. Soon after, several prominent politicians including Yashwant Sinha (former foreign minister), Arun Shourie and social activist Prashant Bhushan approached Supreme Court of India to demand an inquiry into Rafale deal.
The Supreme Court petition was taken up by multi judge bench, headed by Chief Justice Ranjan Gogoi himself. The Supreme Court didn't took a serious view of the case and dismissed the petition. Ranjan Gogoi, former Chief Justice has a tainted history with sexual harassment allegations and his appointment of Rajya Sabha Parliamentarian (India's upper house) after end of his tenure in judiciary. A move from Judiciary to legislative branch by a retiring chief justice is viewed by many intellectuals as great harm to independence of Judiciary & undermine the concept of separation of powers (read 1, 2 & 3). Its speculated the Gogoi was used by Modi regime to extort favorable judgements on various cases like Ayodhya verdict and stalling matters like Kashmir petitions. Arun Shourie, one of the Rafale case petitioners, explained in detail on how Supreme Court created a mockery of the case (1 & 2).
Rafale controversy didn't end there. Soon after, some classified documents on Rafale negotiations was leaked into the media which shed light into conflict between Prime Minister office and INT (Indian negotiating team of Bureaucrats) tasked for Rafale Jets procurement deal through official process. It was revealed that Modi's office was doing parallel negotiations with France & Dassault which was undermining the formally authorized defense procurement channels. Francois Hollande, the former President of France who hosted Modi in 2015 state visit, also made revealing statements in 2018. Hollande claimed that Indian Govt injected Anil Ambani's Reliance Defense company into the deal which contradicted the Modi Govt position that Dassault chose Reliance Defense on its own independent assessment. There were also investigative reports by French news Agency mediapart which detailed kickbacks paid to middleman in the Rafale deal and removal of anti-corruption clauses in the agreement to the benefit of Dassault company (read 1, 2 & 3). These investigative reports and complaints by French NGO resulted in PNF inquiry into Rafale Jet deal.
Why France felt sudden urge to investigate Rafale deal after 5 years? What does France want from India?
To put things straight and in perspective. I don't have any doubt regarding the corruption in Rafale deal. The corruption is rooted at the very top of Indian Govt, right up to PM Modi himself. While Indian Oligarch Anil Ambani benefited Billions of dollars from the deal, Dassault corporation also earned handsomely with inflated price of Jets sold to India. In between the deal, there were various middlemen & bureaucrats on both Indian & French side who may have also earned good commissions & kickbacks. The Rafale Deal was a blatant corruption which was brazenly covered up by Indian authorities and Judiciary.
But what was happening on French side of Rafale deal? The corruption in deal was quite clear right from 2015 but French authorities had no interest in any investigation. If the French Govt was really serious and forthcoming to tackle this corruption, they would've started investigation right there in 2015. Better yet, the French Govt would've walked away from any negotiations with Indian Govt altogether 6 years ago. So to be clear, French Government & institutions are no angels. The corruption is deeply rooted in French political circles as well. As an example, careers of corrupt French politicians like legendary Christine Lagarde and Nicholas Sarkozy is a matter of public record.
While the Rafale deal was finalized many years ago and more than half of 36 Jets have already been delivered to India, its interesting to see sudden urgency in France to investigate Rafale deal corruption. French Govt helped organize the corrupted deal between Dassult and Indian Govt 6 years ago. But later down the line, there have been some ramblings in France on the deal. Recall that Indian Govt position on entry of Reliance defense into Rafale deal was that it was a commercial decision of Dassault corporation. In 2018, former French PM Hollande revealed that it was the Indian Govt which brought Reliance defense into the deal.
Corruption happening in a deal involving governments and private corporations - that i can understand. But inquiry into a deal 6 years later to probe that corruption - what is that? Anybody who understands the Realpolitik of the world knows that these kind of inquiries have nothing to do with actually weeding out corruption and bringing out the truth. These kind of inquiries are politically motivated. So the question is - what does France want from India? To emphasize the point, the French investigation into Rafale deal has a potential to spell political disaster for ruling Modi Govt in India. This investigation has the potential to wreck India-France foreign relations if France really pursues it to a meaningful conclusion. The question can also be rephrased - Why France is jeopardizing foreign relations with India?
There are two possible theories. One theory is that India's political opposition is reaching out to French Govt through back channels, requesting them to initiate Rafale corruption investigation. Since India's investigating agencies & judiciary, under the full control of Modi regime, has buried the scandal in India, only way to expose Rafale scandal is now an inquiry from the side of French Government. This theory is possible, but i don't think India's political opposition has such a clout to convince ruling French Govt to investigate Rafale deal which was made with a ruling Indian Government. Who in their right mind in French Govt would want to jeopardize foreign relations with India? Now a second more plausible theory is that France wants something from India. The inquiry into Rafale deal is just a means to exert pressure on Modi Govt. I don't think this inquiry will reach any meaningful conclusion (though i hope it does) because French Govt and Modi Govt in India will be doing some back channel negotiations behind the curtains.
So far, i can't figure out what does France want from Indian Govt. But we should look at the big picture. Modi has compromised India's national security in a serious way. Modi's Rafale deal undermined India's defense needs, caused loss to exchequer and poured money into pockets of Modi's oligarch friend. But Modi's brazen act of corruption may have also exposed Indian Government to be blackmailed and manipulation by a foreign Government. This reminds me of Trump Presidency in America. Trump family had various business dealings and corrupt practices in foreign countries like China. This raised the issue that Chinese Govt can exert undue influence over Trump by leveraging Trump's corrupt practices in China (read 1 & 2). In India, Modi is foolishly audacious in his corrupt practices, which are mostly meant to benefit his various oligarch friends. Modi's direct personal intervention into Rafale deal was an example of such foolishness which may cost India in more ways than we can think of.
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