New Delhi : In a bid to absolve PM Modi of securing the Rafale offset contract to Anil Ambani as alleged by former France President, the Defence Ministry on Saturday clarified that the aircraft’s manufacturer Dassault Aviation, had entered into a pact for partnership with Ambani”s Reliance Industries back in February 2012, “within two weeks of being declared the lowest bidder for 126 aircraft” by the previous government.
It also endorsed Law Minister Ravi Shankar Prasad’s contention that the offset policy in the defence sector came into existence in 2005 during the UPA regime and it was not a new phenomenon introduced by the Modi government.
In an official press release, the Defence Ministry also reiterated that the government has no role in selection of the Indian offset partner, nor any official knowledge of the joint venture deal signed in February 2017 between Reliance Defence and Dassault Aviation as the guidelines require the vendor to provide details of the offset partners “either at the time of seeking offset credit or one year prior to discharge of offset obligation, which in this case will be due from 2020.”
The ministry even went to the extent of resorting to the character assassination of former French President Francois Hollande kicking up the controversy, saying his reported statement “perhaps needs to be seen in its full context – where the French media has raised issues of conflict of interest involving persons close to the former President.”
It was obviously referring to media reports of an entertainment firm of Anil Ambani entering into a deal with French film producer Julie Gayet, a girlfriend and partner of Hollande, for jointly producing a film in what was described as obliging the former French president.
The defence ministry also sought to explain why and how the offset policy came into play, pointing out that it was for the first time formally announced in 2005 (during UPA-1 regime) and revised several times.
In order to develop a strong indigenous defence industry to leverage India’s huge arms imports, the ministry said a flow-back arrangement is made in the defence contracts, which is widely known as offsets, and constitutes a certain percentage of the contract value. It said key objectives of the Defence Offset Policy is to leverage the capital acquisitions to develop Indian defence industry by fostering development of internationally competitive enterprises; augmenting capacity for research and development in defence sector and to encourage development of synergistic sector like civil aerospace and internal security.
It said the offset can be discharged by many means such as direct purchase of eligible products/services, FDI in joint ventures and investment towards equipment and transfer of technology. As per Defence Offset Guidelines, the foreign Original Equipment Manufacturer (OEM) is free to select any Indian company as its offset partner, the ministry added.
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