We didn’t have a choice on offset partner, says former French President Francois Hollande

Former French President Francois Hollande has claimed that the Indian government suggested industrialist Anil Ambani’s company as the offset partner for the €7.87 billion deal to purchase 36 Rafale fighter jets. Mr. Hollande was the French President at the time the deal was agreed to in 2015.

He told a French news outlet, Mediapart.fr, on Friday that his government didn’t have “a choice” in the selection of Reliance Defence, the company owned by Mr. Ambani.

“It is the Indian government which has proposed this service group and it is Dassault that has negotiated with Ambani. We didn’t have a choice, we took the interlocutor that was given to us,” he was quoted as saying.

Repeated assertions

His comments fly in the face of repeated assertions made at the highest level of the Indian government that it was Dassault Aviation (DA) that selected Reliance Defence as its offset partner. Defence Minister Nirmala Sitharaman had said “no offset contract has been signed so far” and an agreement between two companies did not require the permission of the government. “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 the discharge of offset obligation,” the government had stated.

Responding to Mr. Hollande’s comments, the Defence Ministry tweeted that the statement was being “verified.” “It is reiterated that neither [the] Government of India nor [the] French Government had any say in the commercial decision,” the Ministry said in a tweet.

Reacting to the revelations, Congress president Rahul Gandhi tweeted: “The PM personally negotiated & changed the #Rafale deal behind closed doors. Thanks to François Hollande, we now know he personally delivered a deal worth billions of dollars to a bankrupt Anil Ambani. The PM has betrayed India. He has dishonoured the blood of our soldiers.”

Senior Congress leader P. Chidambaram pulled up the government over the revelations. “In the NDA-negotiated Rafale aircraft deal, we have got no aircraft, we have got only lies. What is the new lie that the government will put out in response to Mr. Hollande? Defence Minister has been called out again! This time by then President of France, Mr. Hollande,” he tweeted.

In September 2016, India and France signed a €7.87 bn agreement for 36 Rafale jets in fly-away condition. The deal includes aircraft, spares, weapons, maintenance and performance guarantee for five years. The deal has a 50% offset clause to be executed by DA and its partners. Under this, DA and Reliance Defence have set up a joint venture to manufacture aerospace components.

In a recent interview Ms. Sitharaman denied any government role in the choice of offset partner in the Rafale deal.

She had said, “Isn’t that a decision of a commercial enterprise to take on its own? I have nothing to do with it. I have not prompted them, not led them, not told them, not instructed them. I have not done any match-making whatsoever.”

The Reliance Group had stated that it got the offset contract from DA and did not receive any contract from the Defence Ministry till date.