Signing an offsets contract is a condition imposed by Indian law (Defence Procurement Procedure) and the realisation of offsets is an obligation but the choice of partners belongs to us under that law, said Dassault Aviation CEO Eric Trappier on Thursday.
In an exclusive Question and Answers (Q&A) session with AFP, Trappier comments came in response to a question on the dealing of compensations or offsets by the French aviation company under the Rafale deal.
"To clarify, what is called 'offset' in English is usually translated into French as 'compensation' or 'contrepartie'. The reference is the contract that we signed, called 'Offset contract'. With regard to its employees and trade unions, Dassault Aviation uses the expression 'contractual offset obligation' or 'contractual 'compensation obligation', Trappier told AFP in the Q&A session.
"Dassault Aviation has decided, in full agreement with this regulation, to create the Dassault Reliance Aerospace Ltd (DRAL) joint venture with Reliance and to build a plant in Nagpur, which should enable us to meet approximately 10 per cent of these offsets obligations," he added.
Quizzed on picking Reliance Defence as its partner, instead of choosing HAL, Trappier said that Dasault made a choice to establish a long-term presence in India through DRAL.
"Dassault Aviation decided to establish a long-term presence in India through DRAL, a joint venture whose governance is ensured by an Indian CEO (Executive Director, NDLR) and a French COO (Director of Operations, NDLR). Dassault Aviation thus exercises technical as well as industrial control of operations, applying its standards and flexibility. This joint venture will produce elements of Falcon 2000 and Rafale," the Dassault CEO said in the Q&A session with AFP.
Underlining that the news of the raging controversy over Rafale deal in India was "sad", Trappier said that "things are moving fast". "The controversies are sad but we are calm. Things are moving fast," he stated.
Earlier on Wednesday, Dassault clarified that it had "freely chosen" India's Reliance Group for a partnership to set up joint-venture DRAL to manufacture parts for Rafale aircraft and Falcon 2000 business jets.
In a statement, Dassault further confirmed that "it has sold 36 Rafale aircraft to India within the framework of the September 2016 Inter-Government Agreement between France and India".
The aviation company also mentioned that it created the joint venture to deliver the offsets committed to India. "In compliance with the Indian regulations (Defence Procurement Procedure) and as frequent with such a contract, Dassault Aviation has committed to offsets in India worth 50 percent of the value of the purchase", the release read. "In order to deliver some of these offsets, Dassault Aviation has decided to create a joint venture. Dassault Aviation has freely chosen to make a partnership with India's Reliance Group", they further added while stating that DRAL was created on February 10, 2017.
The Rafale jets were chosen during the United Progressive Alliance (UPA) tenure in 2012. Initially, India had planned to buy 18 off-the-shelf jets from France, with 108 others to be assembled in the country by the state-run aerospace and defence company Hindustan Aeronautics Limited (HAL).
However, in 2015, the Centre led by Prime Minister Narendra Modi scrapped the UPA's plan and announced that it would buy 36 "ready-to-fly" Rafale jets instead of seeking a technology transfer from France's Dassault Aviation and making the aircraft in India. The deal was signed in the year 2016.
The Congress has been alleging that the National Democratic Alliance (NDA) government has been procuring each aircraft at a cost of over Rs 1,670 crore as against Rs 526 crore finalised by the then UPA government.
The controversy took a new twist recently after former French President Francois Hollande, with whom the deal was cleared, claimed that the Indian government had proposed Reliance Defence's name as the offset partner for Dassault Aviation. (ANI)