In the first part of our expose, we investigated the aspect of potential crony capitalism into the Rafale deal, personally struck by Prime Minister Narendra Modi. In part 2 of our expose, we unearth more evidence that conclusively proves how Modi bypassed everyone to strike a deal that severely undermined India’s national security and interests.

This week, after Janta Ka Reporter published the expose on Rafale deal, India’s main opposition party, the Congress and its vice president, Rahul Gandhi accused Prime Minister Narendra Modi of having indulged in crony capitalism to the tune of tens of thousands of crore rupees.

Post our sensational revelation, the government sympathetic media went into an over drive mode to desperately seek justifications in favour of the Modi government and why it had gone for purchasing 36 Rafale jets in place of 126 as originally agreed by the previous UPA government. “One anonymous French diplomat source”, who mysteriously featured in almost every channel’s and website’s report, supposedly asked the Congress party to “check its facts“ before making allegations.

This anonymous person further said that “Rafale was selected because of its outstanding performance.” This reported argument was laughable because nobody ever raised any questions on the capability or technical superiority of Rafale. The raised questions were all about the process and questionable price variations that led to the announcement of the decision to purchase 36 units of the combat jets instead of the previously decided 126.

Meanwhile, the lack of a credible explanation by the ruling party or the central government further gives credence to allegations of impropriety in the deal struck by Prime Minister Modi. Instead of clearing the cloud around a murkier deal, which raises serious suspicions of misusing the Indian tax payers’ money, one BJP spokesperson made desperate attempts to divert the topic by saying Congress party was raking it up because of the ongoing inquiry in AgustaWestland chopper deal.

Media’s weird arguments fall flat

The current defence minister, Nirmala Sitharaman, also did not clarify anything except terming the allegations against PM Modi ‘shameful.’ But, the government supporting media came up with weird explanations to justify the extra cost (which is more than the actual cost of the aircraft) as being due to the added weaponry, maintenance cost and an advanced radar system. A senior journalist from a leading English news channel aired the same view in his blog. Interestingly, these reasons were first published by a right-wing propaganda website almost a year ago.

Immediately after PM Modi announced his decision from Paris on the purchase of 36 aircrafts instead of 126, there was a furore in India. Major opposition parties raised many questions even then and, as expected, the government evaded them by saying the deal was not signed and the price negotiation was yet to take place. The Modi government bizarrely added that it will save more money through this deal. The then defence minister, Manohar Parrikar gave contradictory statements over and over again.

‘Modi alone struck the deal’

Noted defence analyst Ajai Shukla wrote in his blog that Parrikar was not privy to the government’s decision to purchase 36 Rafale jets in flyaway condition even though he held the defence portfolio. He was merely tasked by Modi to defend this decision. There are other media reports that came out immediately after Modi’s announcement suggesting it was a unilateral decision and PM did not consult with neither the defence minister nor the finance minister- the two main ministries which are involved in the deal.

A simple review of Parrikar’s various responses after Modi’s announcement prove this assertion. In this interview to NDTV Parrikar says the decision to purchase 36 aircrafts instead of 126 was “probably the the outcome of prime minister’s discussion with president of France”. In another interview to another TV channel, he again stated that the decision was taken by Modi alone.

So, the first and foremost question is what prompted Modi to take a unilateral decision of such magnitude? What are the implications of taking such a unilateral decision without the knowledge and consent of the head of the department (read defence minister) in a democracy? Whether the prime minister is well within his right to take such unilateral decisions when it comes to issues related to the matters where national security and public money are involved? Did someone advise the prime minister to take such a call and if someone did, who was that individual? The government of the day must answer.

It’s worth noting that when PM Modi was agreeing the deal on Rafale, Parrikar was busy inaugurating a mobile fish stall in his home state in Goa.

In the same interview to NDTV and in another to Doordarshan in April 2015, Parrikar stressed the point of price per aircraft to be around Rs 715 crore. In some other interactions with TV journalists later, he stressed the same and repeated that the government of the day was not in a position to spend Rs 90,000 crore for 126 aircrafts. But he never bothered to clarify the logic of spending almost Rs 60,000 crore for 36 aircrafts.

In another interaction with journalists, Parrikar said that India did not need 126 Rafale aircrafts and it would have cost Rs 1.3 lakh crore. Here too, he did not bother to clarify how he had suddenly arrived at the difference of Rs 40,000 crore from the amount he had originally stated. He himself stated on many earlier occasions that Rafale was the most superior fighter jet of the day, in its class. In the same media interaction, he blamed former defence minister AK Antony for deciding to go ahead with 126 aircrafts and with a “faltered tendering process” which should be inquired. (Though the government of the day has not initiated any inquiry till date.)

Parrikar’s attempts to defend Modi thwarted by two ex-service chiefs

Parrikar was publicly contradicted by not one but two former Air Force Chiefs on whether India needed 126 Rafale jets or not. Speaking to India Today in June 2015, two former Air Chiefs agreed that acquiring just 36 in place of 126 Rafale fighter jets was simply ‘unacceptable.’

Air Chief Marshal (Retid) Fali Homi Major had said, “To me just 36 Rafales do not make too much of sense. But, my gut feeling is and I am sure the present Air Force hierarchy, the ministry of defence and the government of India are fully aware that these 36 won’t be enough…Because 36 Rafales will amount to just two Squadrons.”

Air Chief Marshal (Retd) Pradeep Naik too agreed and said, “Throughout the statements made by the defence minister, the emphasis is on cost and not necessarily the numbers…126 was the number based on our initial assessment how much we require. Today, the Air Force has 34 Squadrons. Our requirement is 45 Squadrons if you want two front contingency.”

There are two serious implications for such a statement from the then defence minister of the country. The first being that his statement directly questioned the intention of the Indian Air Force because the required number of aircraft was decided by the IAF and not the government. Thus, Parrikar was questioning the integrity of the IAF rather than the political dispensation of the day, which was the Congress-led UPA. Second, his comments were also questioning the entire institution of the then government rather than Antony as defence minister because the decision to go ahead with the procurement of 126 Rafale was taken by the cabinet, not Antony alone. Speaking to the author over the phone, whilst Antony refused to comment citing the sensitive nature of the defence procurement, he said that he had “acted with utmost transparency for the best interest of the national security.”

There is a government document in public domain in the form of Report of Standing Committee on Defence 2015-16. Below is the screenshot of page No:18 of the report.

It clearly shows Parrikar’s utter negation of a serious ground reality, primarily to protect Modi’s interests when he said that India did not need 126 Rafale aircrafts. That was completely misleading and to hide the grim reality to justify Modi’s unilateral decision.

The price difference was discussed in detail in the our first part of the Rafale expose. An anonymous blogger who uses the acronym “Saaf Baat” was the first one to point out the anomalies in the price variation and a possible angle of corruption in the deal way back in October 2016. Hence, it will be interesting to check the factual aspect of the claims which support the government’s narrative.

The first one in that is the claim of add-ons along with life time maintenance cost and meteor and scalp missiles as the reason for price increase. A helmet mounted display is also included. BJP’s Rajya Sabha MP Subhash Chandra-controlled DNA was the leading publication which spread this narrative. It is important to note that in January 2014, the same publication published an article saying 100% price increase for Rafale whereas Dassault Aviation signed a work share agreement with HAL two months later in March 2014 abiding to the terms and conditions of the RFP.

And a government press release dated 28 August 2007 mentions in clear terms that 50% offset is mandatory in this deal. It reads “Under the terms of purchase, the first 18 aircraft will come in a ‘flyaway’ condition while the remaining 108 will be manufactured under Transfer of Technology. The vendor finally selected would also be required to undertake 50% offset obligations in India. The ToT and offset contracts would provide a great technological and economic boost to the indigenous defence industries, which would include Defence Public Sector Undertakings, Raksha Udyog Ratnas and other eligible private sector industries. Foreign vendors would be provided great flexibility in effecting tie up with Indian partners for this purpose.”

The right wing justification of 50% offset obligation, make in India boost due to Modi’s decision to go ahead with 36 aircrafts instead of 126 fall flat here. And more over Transfer of Technology is not included in the current deal.

Quoting the Defence Ministry statement, the website www.defence-aerospace.com Published a piece on 28 August 2007. Elaborating the details in RFP for the price calculation, it wrote, “Asserting that the selection process would be “transparent and fair”, the Defence Ministry said the new fighters were expected to have a lifeline of over 40 years or an actual flying time of 6,000 hours, whichever is earlier. For the first time under the new fighter RFP, the Government has incorporated the Life cycle cost calculation. The tender also stipulates guaranteed serviceability and adequate supply of spares throughout the lifetime of the aircraft. The costs of the aircraft would include direct acquisition including that of weapons and missiles, warranty for first two years, licence royalty for manufacture in India, cost of technology transfer and costs of initial training. While the Defence ministry did not disclose the Air Staff Requirements as laid down by the IAF, sources said Air Force parameters broadly included that the fighters should be able to execute all missions from air defence to ground and maritime attack as well as reconnaissance.”

This further punctures the vague arguments put forth by the ruling party supporters and the sympathetic media houses on the reasons cited for price escalation. There’s simply not an iota of truth in it.

The original price calculation by the UPA government was done inclusive of all the aspects including maintenance, warranty, weapons etc. The “Vanilla Price” narrative of the right wing leaning media houses falls flat here too. It was widely published in the Indian media in February 2015 – just two months prior to Modi’s announcement from France on the purchase of 36 aircraft off the shelf – that there was a 100% price hike byDassault Aviation. However, Dassault Aviation’s CEO Eric Trappier was quick to issue a statement staing that “the pricing issue is very clear. Our pricing remains the same from day one of LI (Lowest bidder). So there has been no change on that front”. (Read it here).

The cheer-leading media not once uttered a word on the exclusion of the Transfer of Technology and its ramifications. On 5 November, 2008, www.domain-b.com reported an interesting press conference held by Dassault Aviation’s senior VP – Military Sales JPHP Chabriol at the company’s Head Quarters.

There he stated, ”When we talk about technology transfer, we mean full technology transfer and not in bits and pieces.” As per the report, He continued: ”The way we work, we first have to obtain clearance of the government before putting in our proposal. If we win the order, we can begin work on transferring technology from day one – unlike our competition,” He goes on: This is not an issue with us. We will not only fully transfer the technology for the AESA radar but also provide the software source code so that that the IAF can programme it in the way it wishes to.”

By unilaterally agreeing to exclude the ToT, not only has Modi put India in a great disadvantage, but also spoiled the opportunity to get access to latest technologies related to combat aircraft manufacturing and a critical radar system. If it was not for serving his personal interests to cater to his friends, why did Modi squander such a golden opportunity needs to be explained and the prime minister is answerable to the country.

Till the Modi government comes out with a complete clarification with sensible reasoning and evidence, this will continue to remain as a case of sacrificing national security interests for personal gratification.