Why the Rafale deal, as predicted, has blown up in Modi’s face

Image result for pics of modi and hollande

[For reasons unknown, an overjoyed Modi with Hollande at the Elysee Palace in Paris]

Rajiv Gandhi “paid the political price…with regard to the Bofors gun. Modi will have to carry the can for this Rafale transaction—a boondoggle in the making …[that] can mar Modi’s prospects.” These were the concluding lines in an op-ed  I wrote titled “Impatience seals worst possible defence deal” in the New Indian Express of April 17, 2015, also posted on this blog. Refer  https://bharatkarnad.com/2015/04/17/impatience-seals-worst-possible-defence-deal/ .  That was 12 days after the prime minister, without prior approval of the Cabinet Committee on Security (CCS) or notice to the then Foreign Secretary S. Jaishankar accompanying him on the state visit, and to the great surprise and delight of the French President Francoise Hollande, announced in Paris the buy of 36 Rafales off the shelf. Subsequent writings, including exclusively in this blog, had talked of Rafale forever sullying the ruling BJP’s reputation much as Bofors has, over time, come to signify  Congress party corruption.

(It was critical writing such as this that, incidentally, led to my fortnightly column getting terminated in that paper “edited” by a BJP-RSS sympathizer. Then again, during the Manmohan Singh years, my campaign against the civilian nuclear cooperation deal with the US resulted in the closure of my column in the Asian Age, and why no major Indian daily newspaper has cared to publish my op-eds. But now with the Rafale issue publicly blowing up in Modi’s and the BJP government’s face, the horde of establishment-friendly commentators in the print and electronic media will rush in to still only mildly criticize Modi’s slate of India’s foreign and military policies which, in truth, is tanking!!)

This brings us to the splash over the selection of Reliance Defence as the Indian strategic partner to fulfill the offsets obligations under the Rafale contract made by Monsieur Hollande’s revelation to the French investigative internet news outlet, Mediapart, on 21 September.  “We didn’t have a say in that [selection],” Hollande stated. “It was the Indian government that proposed this service group (Reliance), and Dassault who negotiated with [Anil] Ambani. We didn’t have a choice, we took the interlocutor who was given to us.” (See  https://www.mediapart.fr/journal/international/210918/en-inde-francois-hollande-s-invite-dans-l-affaire-des-avions-rafale?onglet=full

Just days before defence minister Nirmala Sitharaman had waxed categorical on this issue. “Isn’t that a decision for a commercial enterprise [the Rafale-maker, Dassault Avions] to take on their own?”, she had asked the Indian Express interviewer with rhetorical flourish and, presumably, with her eyes flashing fury (as television usually shows her in high dudgeon, when addressing the Press). “I have nothing to do with it, I have not prompted them, not led him, not told them, I have not instructed them, I have not done any match-making whatsoever, so why am I be [sic] worried by what he would tell me? It may be A, B or C, it may be 70 different partners, it may be buying a product, they may be investing, it may be buying a service, so where am I in it? And how can I tell him you can say this and you cannot say that. Whatever he tells, and claims about obligation fulfilled, I have to hear them out.” [Grammar-wise this is a really mixed-up statement featuring  personal and impersonal nouns, and singular and plural clauses — all referring to Dassault!]

Well, both Hollande and Sitharaman are right! How can this be so? Well, the two apparently clashing views can be squared thus:

Hollande’s ejaculation was in self-defence. His pretty girl friend and cinema starlet, Julie Gayet, it was revealed by the media as having her film — some eminently forgettable movie — financed by Anil Ambani. This was at a time when his Company, Reliance Defence (RD), itching to get into the lucrative defence industrial business, was angling to be the main offsets partner on the Rafale deal. The chronological sequence suggests the younger Ambani brother, perhaps, had an inkling of the truncated Rafale deal in the offing.  Hollande’s interest in clearing his name of the taint of possible quid pro quo by shifting the blame for the offsets partner selection by Dassault to the Indian government, is obvious enough. That doesn’t, however, make his statement to Mediapart a lie.

Equally, Ambani’s commercial interest to get a slice of the Rafale transaction, which one can speculate, drove him to fund Hollande’s mistress’s movie as a means of preemptively removing any resistance from official French quarters, is also quite plain.

Sitharaman is also right in claiming that GOI had absolutely no formal role or say in Dassault’s selecting RD. She can easily back up her contention, secure in the knowledge that there’s not a shred of paper anywhere in GOI/Ministry of Defence and in all the correspondence between MEA and the Quai d’Órsay (French Ministry of Foreign Affairs in Paris)  leading up to the PM’s visit that hints at any such sideways suggestion made by Delhi. So, both Hollande and Sitharaman are in the clear.

That turns the spotlight on the Man in the ring — Modi. The way it happened may have been something like this, that the Indian PM after announcing the Rafale deal, offhandedly and informally mentioned to Hollande in their one-on-one meeting in the Elysee Palace that the French President may care to consider Reliance Defence as possible offsets partner for Dassault? The mere mention of RD by Modi must have been enough for Hollande to assert, as he has that  “We didn’t have a say in that [selection]. It was the Indian government that proposed this service group (Reliance), ….  We didn’t have a choice, we took the interlocutor who was given to us.” Because to Hollande Modi was the Indian government, and he was well aware and as he implied to Mediapart, France was coming up trumps in this transaction. What it had ostensibly lost monetarily by a reduced order of aircraft was being more  than made up by the entire Indian order of 36 high-value Rafale aircraft being manufactured in France, giving Dassault’s production line an extended run, and without the obligation for French Companies to transfer any technology to India. A much sweeter deal all round.

There was, moreover, the gleam of the real goldmine for the French aerospace industry in terms of the exorbitantly-priced air-to-air Meteor and air-to-ground Scalp missiles, and  spares and servicing support assuring 75% serviceability beyond the first 10-years of the Rafale’s presence in the IAF fleet (as mandated in the contract). This last by itself would amount to over $50 billion, according to a former senior IAF officer I quoted in my April 17, 2015 piece in the New Indian Express. Given the routine cost escalation in the armaments field, that sum will go up by multiples for every additional five years of service after 2032 (all 36 Rafales are to be inducted in IAF by 2022)!

There’s absolutely no doubt that Hollande must have promptly written an aide memoire after his meeting with the Indian PM, detailing Modi’s wishes and the benefits to France from following through on his suggestion and installing RD as offsets partner.  Except, the French government will never part with this piece of paper or otherwise refer to any documents regarding follow-up action to get Dassault to select Anil Ambani. In the event, whether Hollande was also persuaded by Madame Gayet’s filmy windfall is besides the point, even irrelevant.

Modi is not personally corrupt. No. But he has an interest in paying back his well-wishers among the Gujrati moneybags who have funded his political ascent, chief among them owners of the Adani Group and the Reliance Group. He must have reasoned that helping Anil Ambani start up a high-end defence industrial firm by feeding it custom would ultimately benefit the country by installing new source of economic growth, technology innovation, and employment generation. It may be recalled that it was after Modi’s trip to Australia and his meeting with the Aussie PM Malcolm Turnbull in April 2017 that, as Australian newspapers and media have hinted, the Adani Group’s $17 billion investment in a port and coal mines in Queensland began getting traction. According to a source in government, Gautam Adani, founder of the Adani Group, was the only other person present for at least a part of the Modi-Turnbull meeting in Canberra.

About Bharat Karnad

Senior Fellow in National Security Studies at the Centre for Policy Research, New Delhi, he was Member of the (1st) National Security Advisory Board and the Nuclear Doctrine-drafting Group, and author, among other books of, 'Nuclear Weapons and Indian Security: The Realist Foundations of Strategy', 'India's Nuclear Policy' and most recently, 'Why India is Not a Great Power (Yet)'. Educated at the University of California (undergrad and grad), he was Visiting Scholar at Princeton University, University of Pennsylvania, the Shanghai Institutes of International Studies, and Henry L. Stimson Center, Washington, DC.
This entry was posted in arms exports, asia-Pacific/Indo-Pacific, Asian geopolitics, Australia, civil-military relations, corruption, Culture, Decision-making, Defence Industry, domestic politics, DRDO, Europe, Geopolitics, Indian Air Force, Indian democracy, Indian ecobomic situation, Indian Politics, MEA/foreign policy, Military Acquisitions, Military/military advice, Missiles, SAARC, society, Strategic Relations with the US & West, Technology transfer, Weapons. Bookmark the permalink.

10 Responses to Why the Rafale deal, as predicted, has blown up in Modi’s face

  1. Shankara says:

    as long as paid media support marwari jain
    mafias and blind bakts ready to gi to any extent to defend modi…

    no need to worry
    all is well so far because the article you quoted is quashed by paid media as hollands opinion no mention of reliance in it at all

    also french govt has said dasault has right to choose partner..france played no role at all

    only cag or parliamentary commity can telm truth

    as long as it does not happen
    we can say modi will be covered by paid media artillcles 5-6 pumped every day

  2. devraj says:

    Sir 126 orders of rafales reduced to 36 as iaf needs would have been filled by super sukhoi programme which make su30 mki almost equal to f18 latest model and possibly 36 more rafales be inducted in iat next decade but will iaf induct tejas mark2 in large numbers in nxt decade thats big question.Right now which aircraft of india is responsible for nuclear strike missions.plz tell.

  3. A says:

    We must remember that for many prasitical business class controlled publications and dalals they have found defence acquition as another means to loot treasury as in usa.
    Those who pushed for private party in stead of state enterprise are also to blame for reliance getting contrat than public sector HAL.

  4. AD says:


    I have always wondered why India did not buy the old production line for Mirage IIIs or F1, along with new Mirage 2000s in mid-1980s, to create the infrastructure base which could one day lead to successful indigenous development of a successor to Mirage 2000s. If they had done it properly, a M2000-like LCA would have been in service for at least a decade by now. Something about inability of senior Indian bureaucrats to think objectively or maybe they just cannot stop stealing from the cash register? Who knows..

    In my opinion, the Rafale deal is one of the many stupidities by BJP government which will sink it in 2019. Their unwillingness to keep gasoline and diesel costs down, obsession with beef-eating and cow protection, focus on proxy indicators of financial health rather than jobs (even if they are BS jobs), inability to reform bureaucracy to any significant degree and the absolutely incompetent people who do PR for them has destroyed a lot of public goodwill which swept them to power in 2014.

  5. AD says:

    On a somewhat different topic, have you noticed that too many ‘educated’ Indians are blind followers of whatever BS ideas and theories come out of the West? Consider economics..

    For the last twenty or more years, many alleged public intellectuals in India keep harping about how the economic model of China will collapse any day now. In reality, it is economic model of West, especially USA, which has been openly imploding in slow-motion for at least the last ten years. There is a reason why somebody as atrocious as Trump was able to win in 2016. All those growth and recovery figures produced by USA are almost exclusively based in further price increases for things such as housing, healthcare and education. In terms of real productive capabilities, China surpassed USA over a decade ago.

    A majority in people in USA have savings of less than a thousand dollars, and this is not because they are especially prolific spenders. Corporate monopolies, oligopolies and other rent-seeking institutions have devastated growth of income for most people while prices for essential goods and services keep going up. And yet.. public intellectuals in India are in thrall of contemporary Western neoliberal economic ideas- the very same ones which destroyed real economic growth and financial security in those countries since 1980s. Did I mention that western countries didn’t do any of the things they now preach to others when they industrialized.

    In contrast to that, the Chinese economic (and governance) model has created real factories, real businesses, real buildings and real wealth at a scale and speed without parallel in human history. And yes, I do understand that they had to some questionable things to pull that off. But is that worse than industrialization through colonization and wholesale theft from other countries as done by the West? Inspite of the very visible success of an alternative approach, Indian bureaucrats and most intellectuals have just doubled down on whatever neoliberal BS ideas come out of western think tanks and universities. And it hasn’t worked well for last twenty years.

    This is oddly reminiscent of current drive to import everything from assault rifles (IWI Ace) and airplanes (Rafale, F-16) from West and sign deals proclaiming indentured servitude (COMCASA) to them.

    • But never underestimate the Chinese. China use its brute force to arm twist anyone. China forced west to forget Tianenmanen, freedom and human rights. When Chinese leaders arrive in Washington DC, they exude confidence bordering on arrogance. They advise America to accept Chinese dominance and superior ways. They declare they will vanquish the west.
      But Indian netas in western capitals are shrill, silly and pathetic. They how1 Pakistan will swallow India, western culture pollute Indian values, Jeans is bad to India, Hollywood is dad and so on. This amateur performance cost India dearly. West mistook India as a third grade power who fear even Pakistan and friendly west.

    • Shankara says:

      chinese economy is run by mad men more than 70 milliom empty aparyments
      2.8 trillion external debt
      30 trillion internal debt
      by 2040 more than 50%ge of population will be above 50 age..

      chinese are following footsteps of usaa fiat currency and debt driven growth will collapse soon

  6. Satyaki says:

    Bharat Sir,

    What happens if a RaGa led alliance comes to power in 2019 ? Nuclear disarmament of India and accepting Pak and China as military overlords? RaGa’s various unaccounted foreign trips appear suspicious, to say the least.

  7. Santhosh Kumar says:


    sir ,how do u respond to this argument by maj gen dhruv katoch ?

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