Indian MoD, Dassault clarify offsets on Rafale deal

24 September 2018

The Indian MoD and French aerospace company Dassault Aviation have issued statements detailing the offsets linked to India’s acquisition of 36 Dassault Rafale fighter aircraft (pictured). Source: Dassault

The Indian Ministry of Defence (MoD) and Dassault Aviation have issued separate statements detailing the defence offset programme linked to the Indian Air Force’s (IAF’s) acquisition of 36 Dassault Rafale fighter aircraft from France.

In responses to allegations of wrongdoing in the offset programme raised by the political opposition in India, the Indian National Congress (INC) party, both the MoD and Dassault said the Indian government was not involved in the decision to select India’s Reliance Group as the French company’s offset partner.

The INC had previously alleged that the offset programme lacked transparency and that related decision making did not go through the correct process as outlined in India’s Defence Procurement Procedure (DPP) 2016. The INC had also alleged that the Rafale acquisition had unfairly promoted the interests of Reliance over state-owned Hindustan Aeronautics Limited (HAL).

In response to the allegations, Dassault said on 21 September, “This contract is a government-to-government agreement. It provides for a separate contract in which Dassault Aviation commits to make compensation investments (offsets) in India worth 50% of the value of the purchase.”

The company added, “This offsets contract is delivered in compliance with the DPP 2016 regulations. In this framework … Dassault Aviation has decided to make a partnership with India’s Reliance Group. This is Dassault Aviation’s choice.”

Dassault went on to explain that its partnership with Reliance resulted in the establishment of a joint venture (JV) – named Dassault Reliance Aerospace Ltd (DRAL) – in February 2017 and the building of an aerospace production facility in India to manufacture parts for Dassault’s Rafale export customers and the French company’s Falcon business jet.

Dassault said that in addition to Reliance, it also has partnerships with several Indian companies to facilitate offsets linked to the Rafale programme. These companies, it said, include Mahindra, Samtel, BTSL Automotive India, Defsys Solutions, Maini Aerospace, and Kinetic India.

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