The Congress on September 5, came up with another aspersion on Rafale deal procedures. All the previous allegations of Congress on Rafale from price inflation to the involvement of crony capitalism have already fallen flat. You may read our previous article Factchecking Finance Minister Arun Jaitley’s Claims on the Rafale Deal for the details. The new argument of the Congress is that the ‘wrongdoing’ of the government in the Rafale deal becomes evident, since in another defence deal with Russia it has insisted on public sector involvement rather than private sector.
The Premise of Rifle Vs Rafale Argument
It has been reported that the Defence Ministry has turned down a Russian request to allow a private company in India to be the joint manufacturing partner in making AK-103 assault rifles for the Army. Congress has raised questions based on this report. Hindustan Times reports it headlined “Why not same rules for Rafale and AK-103 assault rifles, asks Congress” and The Hindu report as “Congress poses rifle deal vs Rafale”.
The crux of Congress argument goes like this: Both the deals with the French government (Rafale) and Russian government (AK-103 assault rifle) are ‘government to government’ in nature. But when questions were raised about Anil Ambani’s firm getting the partnership with French company instead of public sector unit HAL, Modi government had said that in a government to government deal, the Indian government has no role in choosing partner firm. But in the case of Russia, India reportedly insisted the Russian firm Kalashnikov have state-run Ordnance Factory Board (OFB) as its partner, declining the demand from the other side to make Adani Group as its Indian partner. Why did the Modi government not apply the same logic in the Rafale deal?
Fundamental Differences in the Deals
Though both the deals are indeed ‘government to government’, there are fundamental differences. As pointed out by Finance Minister Arun Jaitley, there is no logic in this comparison as both the deals are fundamentally different in nature. FM Jaitley, according to a report, says, “There are 36 planes coming in from there. Nothing will be done in India. In the case of the Russian guns transaction, it will all be built here. These are two completely different transactions.”
The below points invalidate the Rifle vs Rafale narrative of Congress party.
In Rafale, Anil Ambani’s firm is an ‘offset’ partner of French company Dassault. All 36 fighter jets will come to India in flying condition and Ambani’s firm has no role in manufacturing. According to the 50% offset clause in the Rafale deal, Dassault needs to invest nearly Rs 30,000 crore in India for which it had to choose a local partner. Anil Ambani’s firm which is just one of the 72 offset partners Dassault chose in India.
When it comes to the AK-103 assault rifles deal with the Russian firm Kalashnikov, the rifles will be made here in India. This is a fundamental difference from the Rafale deal. It is hard to believe that the Congress, which was at the helm of affairs for a decade, doesn’t know the difference between ‘offset partner’ and ‘manufacturing partner’.
Congress is also claiming that the government’s decision of not involving the Adani group as partner and go for the state-run OFB instead is because of their act of questioning the leaving out of HAL from the Rafale deal. This is also misleading. There was no deal under UPA. All talk about HAL becoming Dassault’s offset partner were only on the negotiation table as the UPA never concluded a deal. If there was a deal, then where are the planes?
This deal was initiated when India’s Defence Minister Nirmala Sitharaman went to Moscow in April this year. It was mutually agreed that Indian Ordnance Factories would partner the Russians. Therefore, when the Russians later put in a request to partner Adani, the Indian government reportedly told them that if they insist on Adani as their partner, they should come through the tender route and the foreign vendor did not have the option to select the Indian company in joint manufacturing partnership. Is this not the right and transparent thing to do?
In an apparent effort to sow seeds of suspicion among people about the government, Congress has been spreading wanton misinformation about the Rafale deal. As we see, none of the allegations stick factually. It is worth noting here that the rifle deal with Russia will provide 6 lakh AK-103 rifles to India’s security forces, according to reports. The forces were deprived of such ammunition during the decade-long rule of Congress-led UPA. Read our earlier piece A Mega Acquisition to Meet Defence & Security Needs and Boost Military Modernisation to understand how this government has been addressing the lacuna in defence procurement on a war footing.