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Modi’s Rafale Defence Deal; Is It Any Different to Bofors

In March, a senior general testified before a parliamentary defence committee that more than two-thirds of the army’s equipment was obsolete, while only eight per cent was state-of-the-art. The navy and air force were only slightly better off. Yet Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) government, which faces general elections next year, is loath to risk the political controversy that it fears might stem from buying more weaponry abroad.

Nor is early movement likely on the Indian Navy’s global procurement of 57 fighters, or an aircraft carrier that is to be built in the country. Meanwhile, the US$6 billion purchase of the S-400 Triumf air defence missile system from Russia, which was earmarked to be signed during an India-Russia summit next month, is likely to be postponed.

Also shifted to the back burner is the US$6 billion purchase of six conventional submarines and army equipment such as armoured vehicles and assault rifles.

By contrast, China and Pakistan are continuing to arm rapidly. Beijing is selling Islamabad its increasingly sophisticated fighter aircraft, warships and ground systems, building up Pakistan as its cat’s paw in South Asia. The capability gap between Indian and Chinese armed forces, already worrying for New Delhi planners, is growing inexorably. Even Pakistan, which once feared an existential threat from India, now talks confidently of halting the Indian military without having to trip the nuclear threshold.

The controversy over the Rafale has further tilted the regional military balance against India.

Since the turn of the century, military planners in New Delhi have grappled with the question of how to replace hundreds of obsolete IAF MiG-21, MiG-23 and MiG-27 fighters that have been steadily retired from service. They were to be replaced by the indigenous Tejas fighter but, in 2001, with the fighter’s development significantly delayed, the IAF backed Dassault’s offer to shift an entire production line to India to build large numbers of the Mirage 2000 fighter, which the IAF already flew and rated highly. However, the BJP government of that time, apprehensive of controversy over single-vendor procurement, ordered a global tender for 126 medium multi-role combat aircraft, of which 108 would be built in India by public sector firm Hindustan Aeronautics Limited (HAL).

At this delicate juncture, Prime Minister Narendra Modi sprang a bombshell. Taking the IAF and his own officials by surprise on a state visit to Paris, Modi announced that he had asked French President Francois Hollande for 36 Rafale fighters in “flyaway condition”. The Modi-Hollande joint statement noted that the Rafales would be cheaper than what Dassault had quoted in the tender, but would have the same configuration. This amounted to a death knell for the tender, and New Delhi duly announced its cancellation.

For the IAF, which fields just 600 fighter aircraft against the 2,000 that China and Pakistan can marshal between them, the cancellation of the 126-aircraft tender and its replacement by a contract for just 36 fighters leaves it short of 90 fighters. And with the government going slow on further procurements, this deficit is likely to deepen.

Although Ambani’s Reliance Group has never manufactured a single aerospace component, it formed a joint venture with Dassault called Dassault Reliance Aerospace Limited (DRAL), which Ambani admits will benefit from close to a billion dollars in offset-related manufacture. Unsurprisingly, the opposition has charged Modi with crony capitalism, a charge the government counters by pointing out that offset rules allow Dassault to choose its own Indian “offset partner”.

Hollande on Friday added to the controversy by saying New Delhi had forced Dassault to pick Ambani. “We did not have a say in that,” Hollande, who was president from 2012 to 2017. told investigative website Mediapart.

“It was the Indian government that proposed this group (Reliance), and Dassault which negotiated with Ambani.We did not have a choice, we took the interlocutor who was given to us,” he said.

In 1989, after the apparently crooked procurement of artillery guns made the Swedish arms manufacturer “Bofors” a byword for corruption in arms deals, the then-Congress government was voted out of power. Now in the opposition, the Congress is looking to make Rafale the BJP’s Bofors-scandal equivalent.

The article was first published in  WWW.SCMP.COM

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