Is the French company not accepting the offset agreement of the Dassault Rafal deal because it had already got enough leeway in the matter and had spoken directly to the Prime Minister’s Office for this? Is the French company not serious about the offset agreement because it had chosen its offset partner in India as the government had said? Why is the government silent on making ‘Make in India’ a shock? And the biggest thing is that why the Narendra Modi government has not put pressure on DASO so far that it should follow this agreement?
CAG raised questions
These questions are arising because the Controller and Auditor General in their report has said that nothing has been done so far to implement the offset agreement of the Rafale purchase deal.
The CAG has said, “It has been found that the foreign vendor has shown no willingness to fulfill the offset agreement agreed to in order to secure the deal.”
The CAG further elaborated this by saying, ‘In the deal of 36 Medium Multi Role Combat Aircraft, Vendor Dasso Aviation and MBDA had said in September 2015 that they would invest 30 per cent of the total corpus in India and use technology. Will do it in transfer. ‘
What is the offset agreement
To understand this comment of the CAG, we have to go to its root and see what the offset agreement was.
In the original agreement with DASO, it was decided that 50 percent of the total value would come in offset agreement, that is, 30 thousand crore rupees would be invested in India.
It was decided that this entire investment would have to be made in 7 years by signing the agreement.
The agreement was exempted from the offset agreement for the first three years. It will start from the fourth year.
Accordingly, the offset agreement was to come into force in October 2019.
It was said in the agreement that a large part of this agreement will be implemented in the last two years.
At least 4 percent of this was to be implemented in the fourth year.
Dasha will invest 16 percent in the fifth year and 23 percent in the sixth year.
MBDA will invest 9 percent and 30 percent during this period.
MBDA had said 89 percent investment in the seventh year itself.
Why DASO get so much benefits in Offset Agreement?
But the controversy over this offset agreement and questions on it continued to arise. At first, Dasha did not want to include this agreement. But when the Indian Negotiation Team, or INT, pressurized him, he agreed after citing a lot of heel.
But India had given him an exemption in the beginning, making many provisions of this agreement nullified. According to a report in ‘The Hindu’, clauses 22 and 23 of the agreement provided that no agent or any agency would play any role in defense deals and they would not affect the agreement in any way. There was also a provision for monetary punishment for violating it. But the French company was pressing for the removal of these provisions from the agreement. The proposal to remove these provisions was later added separately in the agreement and referred to the Parliamentary Committee.
The Hindu also says that in the event of any dispute with India, the provision of arbitration and the provision of information of the company’s accounts were removed from the agreement. This exemption was granted on August 24, 2016.
Why Reliance is silent?
Dassau’s offset partner is Reliance Defense. Now the question arises that why is Reliance not putting pressure on DASO to invest in India according to the agreement and give it information technology? If there is investment, then it will also benefit and the same will earn money by making parts of Rafale. He will get world class technology, that is separately. But Reliance is absolutely silent on this. He has not raised this question once.
One should not be surprised if an old question related to this arises. Once again, the question may be raised about choosing Anil Ambani’s company Reliance Defense Limited as an offset partner. Reliance Defense Limited was established on 28 March 2015, ie, two weeks before the Rafale deal. This was followed by the establishment of Reliance Aerostructures on 24 April 2015, with Reliance Defense holding a 99.98 percent stake in the company. In October 2016 Dassau formed a company Reliance Aerospace with Reliance Aerostructure. It was registered in February 2017 and renamed Dashau Reliance Aerospace Limited.
Why silence on security preparedness?
Due to non-implementation of offset agreement, the question of India’s security preparedness is in danger.
Dassau said during the negotiations on the deal that it would help India build engines for its light combat aircraft. Actually, this Defense Research and Development Organization has been working on it for more than three decades. When it was made and prepared by aircraft, it was found that the engine was not good, the need for a new type of engine was felt. Hence the project of that old Cauvery engine was discontinued.
The question revolves around, the French company is not coming forward to implement the offset agreement, the Indian partner is also silent, as if it has no meaning. Why the Indian government has not pressured the French company to implement it. These are important questions. They make us rotate, why only after ten years, why only Reliance?