The Rafale Deal Controversy is a political controversy in India related to the purchase of 36 multirole fighter aircraft for a price estimated to be  worth Rs 58,000 crore (7.8 billion euros) by The Defence Ministry of India from France’s Dassault Aviation.

Origin of the deal lies in the Indian MRCA competition

Back in April 2015, when Narendra Modi announced India’s order of 36 French-made Rafale fighter jets on the first day of his first official visit to France, it was hailed as proof that the self-styled “man of action” prime minister could deliver.

Negotiations for the high-profile deal had dragged on for three years with deadlocks over the costs and subsidiary clauses frequently stalling the process. But when the French-Indian intergovernmental deal was finally struck, it was hailed by all parties with then French President François Hollande noting that it showed the partnership between India and France had “entered a new stage and our countries are united by the most beautiful kind of relationship, a relationship of trust”.

But three years later, the Rafale deal has turned into a synonym for distrust in India between the opposition and the ruling BJP (Bharatiya Janata Party) amid allegations of collusion, lack of transparency and crony capitalism.

“The Rafale corruption scandal,” as it has been dubbed in the Indian press, has been making headlines since the leader of the opposition Congress party, Rahul Gandhi, brought up the issue during a July no-confidence motion against the government in parliament.

While the Modi government won the vote of confidence with a comfortable margin, it has not stopped the media storm, as the scandal has broadened to include accusations of “the misuse of the media” and legal notices to opposition politicians and a national daily to stop relaying “unverified, speculative” information.

At the heart of the Rafale scandal lies Indian billionaire businessman, Anil Ambani, a frequent presence on Forbes’ “richest” lists, whose family tops the 2017 list of Asia’s richest families.

In his scathing attack on what he calls the “biggest ever” corruption scandal, Gandhi has alleged that India is overpaying for the Rafale jets and that the Modi administration is “lying” about a non-disclosure pact between the French and Indian governments. What’s more, the Congress party leader asserts, the 2015 deal was hurriedly changed by Modi to benefit “his friend” the Mumbai-based billionaire businessman. “The fun part is that the contract was given to Ambani-ji, who has never made an aeroplane in his life nor has he ever taken a contract for defence,” said Gandhi, ironically adding the honorific “ji” suffix to the 59-year-old businessman’s name for added effect.

India’s largest defence contract stalls

The Rafale scandal dates back to 2007, when the Indian defence ministry floated its largest tender ever for 126 multi-role combat aircraft to replace its ageing fleet of mostly Russian-made fighter jets.

Five years later, the Congress-led government announced that the tender was won by Dassault, the makers of the Rafale, and that the agreement included the purchase of 18 Rafales in fly-away condition from the French company. The remaining 108 aircraft were to be assembled on Indian soil in partnership with the Indian government-owned HAL (Hindustan Aeronautics Limited).

At that time, the choice of HAL was hailed as a means for the Indian state-owned aerospace and defence company to acquire advanced manufacturing capabilities to produce and service state-of-the-art fighter aircraft.

But the deal stalled over the next three years over pricing and capacity issues. The original Rafale contract was worth $12 billion, but was widely estimated to have increased to $20 billion, primarily because of the implications of building some of the jets in India.

French Government Response

Former French President Francois Hollande has been quoted by an article on a French Mediapart, an online investigative and opinion journal as stating that the Indian government had asked the French government to nominate Anil Ambani’s Reliance Defence Ltd. as its India partner in the Rafale deal but later Hollande clarified that “it on the sidelines of a meeting in Canada on Friday that France “did not choose Reliance in any way.” When asked whether India had put pressure on Reliance and Dassault to work together, Mr. Hollande said he was unaware and “only Dassault can comment on this.”as reported by AFP

Contradicting Hollande’s claim, French government issued a statement mentioning that French companies have the full freedom to select Indian firms for the Rafale contract. Dassault also clarified that Anil Ambani was Dassault Aviation’s choice.

Indian Government Response

Finance minister Arun Jaitley later dissmised the charges as factually false.

Indian government’s Defence Ministry reiterated its earlier stand while responding to later claims of former French President Francois Hollande about involvement of a particular private firm’s Rafale offset contract by saying “Neither government of India nor French government had any say in the commercial decision”.

Judiciary’s Stand

In September 2018, The Supreme Court of India agreed to hear the PIL petitions related to the controversy. while Congress said they would wait for getting the necessary documents before moving court on the matter. On October 10 The Supreme Court asked the Centre government to provide details of the decision making process in the Rafale deal with France in a sealed cover by October 29.

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