Exclusive interview/ Nirmala Sitharaman, Minister of defence

by Pradip R. Sagar and Sachidananda Murthy

For more than four years, the Narendra Modi government has had a monopoly on political messaging and perception management. The Rafale controversy, triggered this time by former French president Francois Hollande’s comments that the French government had no say in selecting Reliance Defence as Rafale manufacturer Dassault’s offset partner, seems to have brought an end to it. The Congress has stepped up its attack against the government, accusing it of everything from corruption to crony capitalism. Leading the government’s fightback is Defence Minister Nirmala Sitharaman, who said the Congress was trying to scuttle the deal to buy 36 Rafale jets from France. In an exclusive interview with THE WEEK, she said Congress president Rahul Gandhi was spreading canards in Hollande’s name. Edited excerpts:

How has your last one year been? 

I am not sure I have even introspected on it. It was an opportunity I could not have dreamt of. [I am] extremely grateful to the party, and to the prime minister in particular, because this is not something which anyone can ask for. It was given and you have to live up to it. Till today they have extended every support. I have tried giving my best to it. Even the first word of advice which the prime minister gave me after the swearing in—after he came back from China—was: “You are not going to be the defence minister of South Block; you have to meet the jawans posted in different corners of the country. Not just to keep their morale high, but also to understand the conditions they live in. I took that seriously.

We are giving the price of the basic aircraft, which is at least 9 per cent cheaper than the basic price [the UPA] would have arrived at. Eliminating those so-called non-state actors from Pakistan is happening without a break now. Through this surgical strike, we did tell them: look, we know and we will hit back.

So you have been travelling?

Every weekend, I make sure that I visit some part. I went to the farthest point of the Andaman and Nicobar islands [to check] on the jointness in the work of CINCAN [Commander-in-Chief of the Andaman & Nicobar Command). I have been on board aircraft carrier INS Vikramaditya, spent a night, saw the dark night practice. I have relished every minute of it. The ministry of defence is a complex ministry, it is technical and equally humongous. There is also big balancing to do, not just between the services and civil authorities, but balancing within a particular service.

In South Block, have you been a stabiliser or a reformer?

It will be too soon for me to say reformer. Reform-related activities are going on guided by committee reports which have been there. Not just one, but several committees and each committee focusing on some area. I have no hesitation in saying stabiliser, because [this is] a time when challenges are between modernising the force and making sure that the requirements are taken care of. Modernisation does not necessarily mean only replacing man with machinery. It is also bringing in smart men into the force. However, reforms have not been forgotten. Reforms are already laid before me in terms of suggestions, advised reports which have been [submitted] post incidents, on security issues, whether it is Uri or Pathankot. So, the reforms have all come out of various expert opinions.

You are now in the firing line over the Rafale deal. The Congress has raised several issues, the price, the offset partner....

It started with the price, and then moved on to something else. Today, it will not be far from truth if I tell you that the [Congress’s] agenda probably is to have the [deal] cancelled. If indeed you have questions, and charges based on the questions, would you move your goalpost?

For [arriving at the] price for the basic aircraft, they have conveniently picked from their agreement which they did not finalise. They picked on a base price. The Congress is comparing [with] their base price, which is not the base price at all. I do not know where they got those figures. Approximately Rs 526 crore is being compared with Rs 1,600 crore. They are quoting their base price without admitting that their base price was only a starting point in 2007, when they started talking about it. In 2011, after five years of sitting over it, [how could it] emerge as the L1 [lowest] price?

What the Congress is not saying is that this Rs 526 crore would not have remained Rs 526 crore. Each year, as the agreement demands, 3 per cent would have to be added till the first one arrives. Then, towards the second. So, the basic aircraft price which the Congress should at all refer will be somewhere in the range of Rs 787 crore. We are giving the price of the basic aircraft—we disclosed in Parliament, once in 2016, twice in 2018—which is at least 9 per cent cheaper than the basic price [the UPA] would have arrived at.

They are constantly harping on the [first] basic. Today I am [giving the price] with the [armaments]. It is like comparing apples and oranges. You are comparing your basic aircraft at Rs 520 crore without smartly telling the whole truth about escalation cost in currency exchange variations. Then you have picked a fancy number of Rs 1,600 crore [as our price], which may have been the cost of [the aircraft with armament] and also with India-specific additions put on it. It is not the basic price, it is something with all the additions.

There is also the issue of selection of offset partners.

It is a totally brazen attempt at misleading people. Gradually, with the answers coming [from us], they have realised that this will not help. So they moved on to the next charge of offset. There is a process through which you have to get the offset partner.

Offset rules were amended during their days. It started in 2005. Till 2013, they kept amending it. The amended version is not being spoken about. As per the amended offset rules, the [defence ministry] will get to [check] only one year after the offset starts or when the offset process actually comes to an end. The discharge of offset obligation process also has a set of rules. Discharge obligation will commence in 2020. If anything they want to tell me, they can say one year before the discharge obligation sets in. We are not even into that period yet. So, under the amended offset rules, one, we are not in the time yet; two, there is no prior vetting that I have to do to choose with whom they will go for offset obligations fulfilment.

So if that rule has been changed under your rule, are you not aware? And if you are not aware, then I am shocked. If you continue to mislead the public, is that being responsible, especially for a party which has been in government for these many years? In case of offsets, there need not be just one partner, there can be any number of partners. They need not be public sector partners; there can also be private sector partners. This is allowed as per the offset rules designed by them.

As per the rule, they [Dassault] can deal with the DRDO (Defence Research and Development Organisation), they can do something with HAL (Hindustan Aeronautics Ltd), or can go with private parties. I can only sit and watch till such time comes when I can ask whether they have fulfilled the offset obligation. If they have not fulfilled their offset obligations within the period it is due, there can be penalties laid on them.

The opposition says HAL got dropped in your deal.

There is nothing to say that everything was tied with HAL. The talks went on. On critical matters, HAL and Dassault did not agree. An agreement like Rafale has several dimensions. Under each vertical, there will be a set of people from Dassault, from the ministry, DRDO and HAL. There is our cost committee and Dassault cost committee, their technical committee and our technical committee. Like that, there will be various silos in which negotiations keep happening. Each one concludes its bit. Then they are all put together as final contract negotiation committee’s final word.

But before concluding negotiations, things came to a halt. You had [former defence minister] A.K. Antony publicly stating that we do not have money to purchase. You also have the file markings, saying [it was called] back from getting concluded, at a stage where the Raksha Mantri had no role to play. He played that role for whatever reasons. So clearly, the whole thing had reached a dead end. It meant no procurement; no agreement was concluded. You opened the bid and left it unfinished. No MoU was signed.

I tell you [those who profess] love for HAL had denied HAL this much amount and took it to someone else. HAL and Dassault could not agree on terms of production. With some component it appeared that it would be 2.5 times more [expensive] than what Dassault wanted it to be. HAL probably also said, ‘We may not be able to give you guarantee for the quality and timeline by which we can supply this 126 [aircraft].’ As many as 108 had to be produced in India and 18 were coming under fly-away conditions. So, on these grounds, negotiations with HAL could not be concluded.

The charge is that you have let down HAL.

I have gone through the records. I have found that in [the UPA’s] ten years, approximately Rs 10,000 crore worth of orders per year was given to HAL, for several things that HAL produces, such as helicopters. Whereas, in our four and a half years, we have given up to Rs 22,000 crore orders each year. Nothing to do with Dassault; nothing to do with Rafale. HAL requires orders and we are giving it twice more than what you have done in your ten-year period on a yearly average. So, where have we let down HAL?

Why did not the Raksha Mantri [Antony] try to solve issues between Dassault and HAL? You could have done that, and made HAL to rise to the expectation of being a partner who wants to produce under licence. Let us be clear that 108 Rafale aircraft were to be produced under licence under TOT [transfer of technology]. It has its own limitations. But for that, you could have done everything to lift the HAL bid in such a way that it convinced Dassault. With the defence ministry’s help, HAL could have risen to the occasion. Why did they abandon HAL? They let down HAL miserably. Neither did they give HAL orders, nor did they lift HAL up to the requirements of Dassault for Rafale agreement. They did not bother to pay attention to the HAL facility in Uttar Pradesh, where they produce Dornier aircraft. Rahul Gandhi is an MP from Uttar Pradesh. What did he do to boost the capability of HAL? What have they done for several ordnance factories?

But, how was Reliance chosen? Allegations are being raised against the prime minister, too.

The original equipment manufacturer is allowed to go to any partner. It is the rule made during the Congress rule that the partner can be a public sector or a private player. So, where am I in this picture?

So, the way in which it is moving is: throw allegations; let the government keep giving answers. Throw with such brazenness, using abusive language, because it will make you appear as if you are emotionally involved. I am not surprised with statements such as ‘prime minister chor hai’ coming from a party which has always chosen such statements—not from a district-level leader’s—but from the party president’s mouth. The Congress has always done that; call him [Modi] any name like maut ka saudagar (merchant of death) or gande naale ke keede (gutter worm).

But they are quoting [former French president Francois] Hollande.

I have seen a video, in which it is said, “former French president Hollande told me that your prime minister is chor.” Rahul Gandhi said it. Today, with due respect, a former president of a country is telling that we had no option and therefore he had to do! Offset with 70-80 people! A list is being made out of how many. Because officially I have no information on with whom how many offsets are being tied up. From all that he is quoting, I would say, if [Dassault] is indeed going for 70 people, I had no option. If Dassault is going with 70 or 80, I have no official information. To say that they had no option but to give it to one, when 70 are in the options list.

Has Hollande said that apke pradhan mantri chor hai (your PM is a thief)? Has he?

I want this to be affirmed. If he has indeed said that, then I think I want to take other words seriously and say, all right, I want to know was there any interlocutor who went? Have we appointed any interlocutor to say that you have to go for fulfilment of offset obligations here or there? You have told me now, that former president Hollande has said apke pradhan mantri chor hai. Has he?

Are you trying to establish that crony capitalism or corruption, which you smelt, is there? Are you wanting to get convincing answers, or are you spreading canards, taking the names of leaders from outside? And, a minister from Pakistan tells you, you are the next PM.

On August 31, you [Rahul] come out with a tweet which is predictive—watch out; there is going to be a bomb blast. And it is going to happen in France. What’s the bomb blast? The statement by former president? How did you know about it even earlier? Have you been talking to each other saying blast it on this date? It is national security. It is serious business. I am raising questions on this conspiracy.

Why didn’t you go for 126 aircraft?

Under UPA, they were getting 18 aircraft, which was just one squadron under fly-away condition. We are taking two squadrons under inter-governmental agreement. After that, if their agreement was to be made, it would have been to produce 108 aircraft in this country over a certain timeline. That is not going to be like the day the first aircraft comes, we will also have the 126th aircraft. No, that is also going to be produced gradually. Only 18 first. Even in their ten years, when the squadron strength was coming down from 42 to 33, they still chose to buy only 18 in fly-away condition. They kept having this very tortuous debates and discussions to have somebody produce the remaining 108, which they did not conclude. Neither did they conclude 18, nor did they conclude 108.

You mean, they did nothing?

This 126 demand did not happen in 2004, when the UPA came to power. It was there even before. It was under A.B. Vajpayee’s government that the first ever recognition that we have to boost the air force strength happened. So, we had already started the steps. But you spent solid ten years without that thought pinching you. You need fighter planes. You did not have a deal. Your phased manner production was not tied up. Your 18 jets was not tied up. You go away in 2014 and today you are asking me why I am buying only 36? Air Force strength was coming down during your ten years of governance. You did not buy one. We bought 36 and we did not stop it there. The request for information is already issued [for more] early this year to various suppliers.

Are we considering follow-on order on Rafale?

We have asked RFI (request for information) and it could be anyone. Follow-on is the RFI, which we have issued to everybody. So, the 36 are coming, rest will come later.

Do you see any political damage?

I do not see any damage for us because we clearly came out showing the intent of this government to support the Air Force, to get for the IAF what it required, through a transparent process of inter-governmental agreement. Also making sure for the next set of things we need to buy. If anything, the damage will be on them [the Congress] for these false allegations or projections which the Congress is making. They should be seen as to who they are. Not a responsible party. Not responsible towards meeting the requirements of operational preparedness of the Air Force. They only keep talking. What have they shown in action? How many acquisitions happened during the Congress party’s ten years?

When we came to power in 2014, [Manohar] Parrikar spent a lot of time assessing what is this list of backlog; why procurement have not happened. For that matter, what was the first raging debate? That we may not have enough ammunition to sustain ten days of intense war. They could not even buy ammunition or equipment. Ten years they spent without looking at defence preparedness. And today, when we are buying, national interest demands that the Congress come out to say how they took care of operational preparedness of the Army. You left it high and dry. They did not have ammunition to fire. Parrikar appointed committees to go through the backlog and to expedite procurement. Then Arun Jaitley spent his time simplifying procurement rules. They [the Congress] tied themselves up in knots. The offset rules were under them. Can they come out with the number of offsets they okayed during their ten years? Actually none. If they had placed orders, I would be getting deliveries today.

What have you done on these?

Today we are holding DAC [defence acquisition committee] meetings twice a month. We have been delegating powers to vice chiefs of services to procure ammunition. We only started buying bullet-proof jackets [which were pending for long]. Oh God, I only wish they sit and introspect before throwing allegations.

Do you think the prime minister should speak out?

I am not answering this as defence minister of the country now. The demand that the prime minister should answer has been there since 2014. This is the tendency of the Congress for everything. I like to recall there were was a series of attacks on churches, and those were happening in different states. The Congress asked the prime minister for explanation. All these states were ruled by different parties. What eventually came out in those attacks? Those were done by different people for different reasons. They were repeatedly asking for the prime minister’s response without even waiting for the investigation to be completed. When findings came out, each incidents happened due to non-communal reasons.

There are photos of private industrialists along with Dr Manmohan Singh. No, but the photo where someone was probably standing in the third row of some CII delegation, the Congress asked the prime minister to respond.

Do such attacks affect the government?

No. Only yesterday, I cleared engines for T-90 tanks. I have not held back any procurement in the ministry. I have not held back any transfer or promotion. Issues of jointness [among services], OROP (one rank, one pension), have been given. We are paying more than Rs 10,000 crore for OROP.

Now, decisions are happening without middlemen. These corridors are now free for officials to move around and do their work. Decisions in the ministry are being made without even one dalal (agent) around. I challenge anyone to tell me whether they have heard from 2014 till today a whisper that something fishy is happening in this ministry. We have shown [that it is possible to be transparent]—even in a ministry where highly technical things are being bought, and where everything is in humongous amounts—with intrinsically built in transparency mechanism and by following due process. Today we are not having any waiting list. All committed expenditures for buying are going through. There is not one allegation of wrongdoing. The Congress will have to learn a lot before they speak. Now the defence ministry can function without middlemen.

One major issue on security that you had to handle was Doklam. Has there been any change of stand of the Chinese forces after Doklam?

I am not giving a sweeping statement about it. A large part of the LAC [line of actual control] is not even demarcated. There is a difference of perception in what I think the border is and where they think it is. As a result, whether they are civilian grazers or uniformed personnel, straying in and out happens. Sometimes you reach a flash point. It gets sorted out through border personnel mechanism or even at the DGMO level. So, I will not say there is no such flashpoint happening. Incursions may happen on and off. But we are able to solve it all with border personnel meets and discussions.

I had an elaborate discussion with the visiting Chinese defence minister. But before that, because of the prime minister’s informal meet at Wuhan [in China in April], there was a sense that we should work together and cooperate. We are neighbours. We are certainly competing in many grounds, but we cannot be adversaries. As long as there are discussions, there are possibilities for ironing out differences.

The surgical strike was touted as an achievement of the government. What exactly has been achieved?

Eliminating those so-called non-state actors from Pakistan is happening without a break now. There had been ceasefire violations happening to the extent that they affect the lives of people living on border areas. In 2016, a neatly targeted hit was made, which Pakistan could not deny. Through this surgical strike, we did tell them: Look, we know and we will hit back. We are not going to take this lightly; you cannot disown every intruder by saying he is not a soldier, as he is wearing civilian dress or that he is a freedom fighter.

The ties with the US are perceived to be putting spokes in our relations with Russia. Especially on deals like the S-400.

Negotiations on S-400 [air defence system] had happened over several years. It has reached a stage where it can be concluded. We have expressed [to the US] the reality about Indian legacy particularly on army and air force equipment from Russia. It is a legacy issue. And, the US secretary of defence has also recognised the fact when he spoke about it. There is an understanding in the American mind. I have seen [the US] defence secretary himself talk about it, that India has a legacy and, therefore, there is a need for certain waivers. So, that recognition exists.


Defence offsets were introduced in 2007 by the UPA-I government. In such an agreement, a foreign company that acquires a contract has to make compensation investment of 30 to 50 per cent of the value of contract amount in the Indian market. Accordingly, Dassault Aviation has to invest around Rs 30,000 crore to procure components and services from India.

Dassault Reliance Aerospace Limited (DRAL) is one of the 72 partnerships formed by Dassault with Indian companies. Other partners include Mahindra, SAMTEL, Godrej and TATA Advanced Systems. The Union government says it had no role in the selection of offset partners.