The new article, written by Yves Pagot, caused a political storm in India, with the Congress saying it proved that PM Modi had made it 'obligatory' for Dassault to partner with Reliance

NEW DELHI: In another twist to the Rafale controversy, a French aviation portal has published a document which Dassault Aviation COO Loik Segalen presented to a confederation of French trade unions, explaining why Rafale had tied up with Reliance as part of their offset obligations.

Mediapart, a French online journal, had last week cited what it described as an “internal” document allegedly “proving” that the partnership with Reliance was “obligatory” and “mandatory” for Dassault Aviation to sell Rafale jets to India.

The new article, written by Yves Pagot, a former French Air Force official and defence writer, says the document is actually the union’s summary of a mandatory discussion with Segalen, where he explained that Dassault was shifting its production of Falcon business jets to Nagpur in India under the DRAL (Dassault Reliance Aerospace Ltd) joint venture because of its obligations under the offset clause.

The report caused a political storm in India, with the Congress saying it proved that Prime Minister Narendra Modi had made it “obligatory” for Dassault to partner with Reliance.

Dassault CEO Eric Trappier then told AFP that the document refers to India’s “offset clause” and shifting of a part of the work to India as a “mandatory” part of the 36 aircraft deal, and that Dassault “has freely chosen to make a partnership with India’s Reliance Group”.

Dismissing claims that the document proved “effort to browbeat Dassault into accepting Reliance as a partner”, a senior Indian official said, “Assuming that Reliance is the sole beneficiary of the `30,000, or approximately $5.4 billion which has to be reinvested in India under the offset clause is totally wrong. It is not just Dassault, but three other French outfits involved in building the Rafale jet who are all part of the offset clause.” They are Thalès, which makes radars and avionics, Safran, which makes engines and electronics, and MBDA, which makes the aircraft’s weapons.

According to the official, all of them are scouting for and negotiating with possible Indian partners — including DRDO, L&T and even HAL to fulfill their part of the offset deal. “Dassault may eventually only account for anything between 3 to 10 per cent of the total offset deal,” he said.

“The offset is only a business proposition, the companies involved have to make it commercially viable,” said Claude Arpi, a French journalist, author and historian based in India. “Dassault or Thalès or Safran will never share important papers with journalists. It is just not possible.”

They know the factual position. During Antony's days they had selected Mukesh for the offsets because Reliance is a reliable commercial partner. When Modi decided to buy 36 Rafales off the shelf as stop gap, Anil was selected by Dassault."