Rafale offset details will be known when procurement begins: Sitharaman


Defence Minister Nirmala Sitharaman has vehemently denied any allegation of crony capitalism in the deal to acquire 36 fighter jets from France, saying that the details of foreign manufacturers fulfilling the requirement to invest back a part of deal value in India will only be known when procurement begins.

Nirmala Sitharaman said: “Dassault and two or three companies are participating in the supply of Rafale. So each one of them will have an offset obligation to be fulfilled.”

She was addressing an event organised by ‘The Economist’ magazine in Mumbai on Friday.

Elaborating on the obligations of foreign original equipment manufacturers offset obligations, the requirement to invest back a part of the deal value to boost Indian defence manufacturing, Nirmala Sitharaman said each company involved in the supply will have its offset partners in India.

Defence Minister Sitharaman said: “Now for Dassault alone to come back to me to say that their offset is getting fulfilled completely, through one, two, three or any number of companies with whom they either go with investments or go for a buying of a product or buying of a service, (it) is left to Dassault to come to me to claim it.”

Defence Minister Nirmala Sitharaman.

“Till such time they claim each and everyone of them, I will not know whether they are with one, or ten or with hundred (Indian offset partners),” explained the minister who has been battling the opposition charge against the government of favoring Anil Ambani’s firm over state run Hindustan Aeronautics Limited.  

“The offset partners’ details will be known when they approach me with bills detailing what kind of service is being received, whether it is in the form of equipment or investment,” clarified the defence minister.

Congress President Rahul Gandhi.

While the Congress has alleged irregularities in the Rafale deal and accused the government of favouring Ambani’s joint venture with Dassault Aviation, both Indian and French governments as well as both the firms – Dassault Aviation and Anil Ambani led ADAG Group have vehemently denied Rahul Gandhi’s allegation.

Rafale. (Photo Courtesy Dassault Aviation).

Defence Minister said: “They still have time to come back to me to say look, my offset is getting fulfilled through these routes. They will have to submit transaction details of who got the money, for what purpose. Till all that is done, I cannot even claim how many people they (Dassault) are going with,” the minister added.

Nirmala Sitharaman said that the previous UPA government had floated a global tender for procurement of 126 Medium Multi-Role Combat Aircraft but never clinched the deal.

“They never bought it (the fighter jet) but always claim that they bought it at one particular amount,” said Nirmala Sitharaman while countering Rahul Gandhi’s allegation that NDA government paid a higher price for the same aircraft than what was negotiated by the previous UPA Government.

She said the UPA government went for an open tender but the present government opted for an inter-governmental tender.

Sitharaman said: “For the 18 and for the rest they (UPA government) went for a tender. What we have done is that we have gone for inter-governmental tender for first 36 emergency number while rest of the procurement will be through strategic partnership.

Talking about another request for proposal floated by India for acquiring nearly 110 more fighter jets, Nirmala Sitharaman added that there will be an overseas manufacturer along with an Indian partner for manufacturing the rest of fighter jets in India.

“The processes have been simplified, (made) much transparent now. That is why there is so much information available in the public domain. There is no scandal or crony (capitialism) any way,” said the defence minister.

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