Francois Hollande, who was president of France when the deal for 36 Rafale fighter aircraft was announced and signed with India, has said Anil Ambani’s Reliance Defence was chosen as the offset partner by Dassault because the Indian government had “proposed” its name.
“We didn’t have a say in that. It was the Indian government that proposed this service group (Reliance), and Dassault who negotiated with Ambani. We didn’t have a choice, we took the interlocutor who was given to us,” Hollande was quoted by French news website Mediapart.fr about the offset contract to the private Indian defence manufacturing firm.
Hollande was responding to The Indian Express news report referred by Mediapart that Ambani’s Reliance entertainment had co-produced a French film Tout La-Haut with his partner Julie Gayet when India and France were negotiating the Rafale deal, “That’s why, on the other hand, this group (Reliance) did not have to give me any thanks for anything. I couldn’t even imagine that there was any connection to a film by Julie Gayet.”
On being asked by The Indian Express, the French embassy in New Delhi refused to comment on Hollande’s statement.
Messages left on the answering machine of the media officer of Hollande did not elicit any response. The spokesperson for Reliance Defence was not available for comment.
In a Twitter update, the ministry of defence said: “The report referring to fmr (former) French president Mr Hollande’s statement that GOI insisted upon a particular firm as offset partner for the Dassault Aviation in Rafale is being verified. It is reiterated that neither GoI nor French Govt had any say in the commercial decision.”
As reported by The Indian Express on August 31, Reliance Entertainment announced on January 24, 2016, that it had entered into an agreement with Gayet’s firm, Rouge International, to jointly produce a French film. Two days later, Prime Minister Narendra Modi and Hollande signed an MoU in New Delhi for the purchase of 36 French jets in flyaway condition.
Hollande told Mediapart that he was not aware of the announcement of the film with Gayet during his visit to India as he was busy with matters of the state. As per Mediapart, the film was made on a budget of €10 million, which included a promised Indian funding by Reliance Entertainment of €3 million, eventually reduced to €1.6 million.
Gayet told Mediapart that the funds were not paid directly by Reliance but through an investment fund, Visvires Capital, based in Paris and Singapore, which was founded by Ravi Viswanathan, a former French business banker of Indian origin. Viswanathan has personally known Ambani for 25 years and had invested with him in a wine business in India, which he told Mediapart.
Directed by French actor and film-maker Serge Hazanavicius, Tout La-Haut was released in France on December 20, 2017, but never released in India. This was eight weeks after Dassault Aviation chairman Eric Trappier and Ambani laid the foundation stone for DRAL manufacturing facility in Nagpur in the presence of then French defence minister Florence Parly; roads and highways minister Nitin Gadkari; Maharashtra chief minister Devendra Fadnavis; and ambassador of France to India Alexandre Ziegler.
The deal for 36 Rafale aircraft in a government-to-government agreement was announced by Modi on April 10, 2015, during his visit to Paris, which led to the cancellation of the 126-aircraft deal being negotiated by the previous government. The deal was eventually signed on September 23, 2016, in Delhi between then defence minister Manohar Parrikar and his French counterpart.
As per Mediapart, Hollande said that the original deal was to be 126 aircraft, “but with the change of government (in India in 2014), the Indians reformulated their proposal, which was less attractive for us, since it was 36 aircraft only. But the manufacture was planned in France, contrary to the previous proposal. So we lost on one side, but we won the other.”
Under the offsets clause, France is to invest 50% of the total order cost in local contracts in India, worth Rs 30,000 crore. The offset obligations of the deal are to be discharged from September 2019 to September 2023, as per the contract.
Rafale offset was the first project of this magnitude won by Reliance Defence, which placed it at the centre of a major political controversy. Opposition parties, including the Congress, have alleged that undue favours had been granted to Ambani’s firm in this deal, a company without any defence manufacturing experience.
In a statement, the defence ministry had stated on February 7 that “no Indian Offset Partner for the 2016 deal for 36 Rafale Aircraft has been so far selected by the vendor (DA) because as per the applicable guidelines, DA is free to select the Indian Offset Partners and provide their details at the time of seeking offset credits, or one year prior to discharge of offset obligation”.