Dassault CEO Says, Reliance Has 10% Offset In Rafale, In Talks With 100 Firms

Dassault CEO Says, Reliance Has 10% Offset In Rafale, In Talks With 100 Firms

Dassault CEO Says, Reliance Has 10% Offset In Rafale, In Talks With 100 Firms 

NEW DELHI: The CEO of Dassault, Eric Trappier has said that Dassault Aviation's joint venture with Reliance represents around 10 per cent of the offset investments under the Rafale jet deal.

Mr Trappier told AFP, "We're in talks with about 100 Indian firms, including around 30 with which we've already confirmed partnerships."

Defence Minister Nirmala Sitharaman, spoke separately at a briefing in Paris, reiterating the government's claim that it had no idea that Dassault Aviation would team up with Reliance Group, run by Anil Ambani.

Many reports have claimed that the Dassault Aviations was forced to choose Reliance by PM Modi, despite it having almost no experience in the aviation sector.

The French investigative website Mediapart, quoted the notes of a meeting between Dassault management and workers' representatives which described the choice of Reliance as "imperative and compulsory", on the eve of Ms Sitharaman's visit.

"We are very clear: With the government of France, we agreed to purchase 36 Rafale aircraft in flyaway condition," Ms Sitharaman said.

"And in an intergovernmental agreement, there are no mentions of any individual firms," she said.

"It is more for the companies which have chosen A, B or C as their partners to answer questions if there are any," she said.

Dassault, in a statement, released a transcript of what it said was Ms Trappier's interview with AFP in which he was asked about the status of the offsets.

Also Read: Top Court Asks How Was Rafale Decision Made,Won't Get Into Pricing

"Signing an offset contract is a requirement of Indian law (Defence Procurement Procedure). The implementation of offsets is an obligation and, under the Indian regulation, the choice of the partners belongs to us," Mr Trappier was quoted as saying.

"In full compliance with this regulation, Dassault Aviation therefore decided to set up the DRAL joint venture with Reliance and build a plant in Nagpur, which should enable us to meet about 10% of these offset obligations. We are in negotiations with about a hundred Indian companies and partnerships have already been concluded with about thirty of them," he was quoted as saying.

The CEO of Dassault had said,what is called "offset" in English is usually translated into French as "compensation" or "contrepartie".  Dassault Aviation, with regard to the staff and trades unions organizations, uses the term "obligation contractuelle d'offset" or "obligation contractuelle de compensation", he said.

For years, the makers of Rafale, Dassault negotiated for years with  Hindustan Aeronautics Limited (HAL) for the order, with the jets being jointly built in India.

After PM Modi took the office, those talks were cancelled, when he decided to purchase the jets directly from France.

Mr Trappier, when questioned why Dassault chose Reliance over HAL as its partner, said that Dassault Aviation decided to establish a long-term presence in India through DRAL, a joint enterprise in which governance is provided by  a French Chief Operating Officer and an Indian Chief Executive Officer.

"Dassault Aviation therefore exercises technical and industrial control over the operations, applying its standards and its flexibility. This JV will produce parts for the Falcon 2000 and Rafale. The choice of the Nagpur site, in central India, was dictated by the availability of land with direct access to an airport runway" he was quoted as saying. On Wednesday, Dassault had said that it has "freely chosen" to form a joint venture with Reliance. However, this statement was recently contradicted by Francois Hollande, the former French President under whose watch the Rafale deal was signed.

Last Month, Mr Hollande caused a political ruckus by saying that France had "no choice" but to join with Reliance after it was pushed by the Indian government -- comments which were seized upon by Indian opposition parties.

As per the Indian defence procurement rules, foreign companies winning contracts must "offset" or reinvest half the total value -- in this case around eight billion euros -- in joint ventures or purchases with Indian firms.

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