Decoding the Rafale deal

BRP Bhaskar

Gulf Today

 

A slanging match is on between the ruling Bharatiya Janata Party and the opposition Congress on the deal which Prime Minister Narendra Modi struck with France to acquire 36 Rafale warplanes.

According to Congress President Rahul Gandhi, Modi tweaked the agreement the previous United Progressive Alliance government had negotiated with a view to favouring a crony businessman.

The search for a new multi-role combat aircraft to replace the ageing fleet of Soviet MiGs began when the first BJP-led government was in power and continued under the two UPA governments.

After field trials in which six manufacturers participated, Dassault’s Rafale was adjudged the best, and in 2012 negotiations began for acquisition of 126 aircraft. 

UPA negotiated a deal to acquire18 aircraft in fly-away condition and manufacture108 in India in collaboration with the state-owned Hindustan Aeronautics Limited. Dassaault’s talks with HAL were inconclusive when the change of government took place in 2014.

On an official visit to France in 2016, Modi signed an agreement with President Francois Hollande to buy 36 Rafale aircraft in fly-away condition.

It dumped the 78-year-old HAL, which has produced some small planes and helicopters on its own, and manufactured, under licence, aircraft of foreign design like the British Vampire, Gnat and Jaguar and the Soviet Mig 21, Mig 27 and Sukhoi. Anil Ambani’s Reliance Defence, which was incorporated just weeks before the Modi-Hollande agreement, came in as Dassault’s Indian partner.

The Ambani firm cut into the deal under an offset clause in the agreement which requires France to invest half the contract cost in India. According to media reports, France will invest 30 per cent of the cost in India’s military aeronautics-related research programmes and 20 per cent in local production of Rafale components. 

The Congress says under the UPA deal an aircraft would have cost India only Rs 5.26 billion. Under the Modi deal the price goes up to Rs 16.70 billion.

The government refuses to give details of the price agreed upon, saying there is a clause in the agreement which binds it to maintain secrecy.

Defence Minister Nirmala Sitharaman claims the price fixed by UPA was for the bare aircraft while what India is now getting is aircraft fitted with sophisticated weapons. Experts aver the price difference is too high to be attributed to the difference in equipment ordered.

Ms Sitharaman is one of the most articulate BJP leaders. But the more she talks on this issue the more she wades into deep waters. 

She seeks to explain away HAL’s exclusion saying UPA did not pump money into it to enable it to take up manufacture of Rafale. She does not say why her government, instead of pumping money into HAL, brought in a private company with no experience of manufacturing even aircraft parts, let alone a whole aircraft.

She insists the government had no role in the selection of Reliance Defence as Dassault’s partner. Under the 2016 government guidelines, all defence offset proposals require the Defence Minister’s approval.

She is silent on how India will get 90 more aircrafts to meet the assessed requirement of 126.

Anil Ambani is the younger brother of Mukesh Ambani, who owns the larger of the two Reliance conglomerates. Both brothers have been close to Modi since his days as Chief Minister of Gujarat and are among the BJP’s financiers.

In July, Modi had invited flak by giving Mukesh Ambani’s Jio Institute, which has not even started working, “Institute of Eminence” status, making it eligible for a government grant of Rs 10 billion.

It is reasonable to assume that Dassault pushed up the price of the aircraft to cover the offset costs. The government has rejected suggestions for a probe into the Rafale deal by a joint parliamentary committee. Since the BJP will have a majority in the JPC there is no need to fear an adverse decision. But, then, the JPC will be able to call for information which the government is hiding.

As the Congress mounted an attack on the Rafale deal, Anil Ambani shot off two letters to Gandhi to say the party was misinformed, misdirected and misled by malicious vested interests and his corporate rivals. 

Taking a leaf from the book of BJP President Amit Shah’s son, Jay, who obtained a restraint order against the Wire.in, he also sent legal notices to the Congress’s official spokespersons and the Gandhi family–owned newspaper National Herald in a bid to stop them from pursuing the subject on pain of heavy damages claim.

When the Ambani family assets were divided in 2007, according to Forbes, Mukesh’s net worth was $49 billion and Anil’s $45 billion. The 2017 Forbes list puts Mukesh’s assets at $38 billion and Anil’s at 3.15 billion. Fall in the value of the Rupee may account for the decline in Mukesh’s assets. The steep fall in Anil’s assets points to business failures. The Rafale deal offers him a bailout.--Gulf Today, Sharjah, September 18, 2018

India, US inch closer

BRP Bhaskar

Gulf Today

India took the penultimate step towards actualisation of its strategic defence partnership with the United States when the two countries signed the third of four foundational agreements at the first joint meeting of their Defence and Foreign Ministers, dubbed 2+2, in New Delhi last week.

The Communications Compatibility and Security Agreement (COMCASA), which they signed, opens the door for transfer of specialised equipment for encrypted communications for US-origin military platforms.

The agreement comes into effect immediately. It will facilitate interoperability between the militaries of the two countries.

Since India has a lot of military equipment originating elsewhere, especially Russia, certain specific provisions have been incorporated in COMCASA to safeguard its national and security interests. However, it also includes a provision for US inspection of Indian bases. 

The quest for strategic partnership began when President Bill Clinton visited India in 2000. The first Bharatiya Janata Party-led government, which was in power then, signed the first foundational agreement in 2002.

There was no progress during the ten years of the Congress-led United Progressive Alliance government. The second foundational agreement was signed by the Narendra Modi government in 2016.

Now only one agreement remains to be signed. It is the Basic Exchange and Cooperation Agreement (BECA), which provides for geospatial cooperation.

It was decided at the talks to establish hotlines connecting India’s External Affairs Minister and Defence Minister with their counterparts, the Secretary of State and the Secretary of Defence.

Modi has been pushing the strategic partnership, viewing it as something that will help realise India’s global aspirations. However, the progress has been slow because of difficulties arising from the different approaches the two countries have followed since long on many issues. 

The present forward movement, after two postponements of the inaugural 2+2, comes even as the US is pressing India to stop buying oil from Iran by November and desist from going ahead with its plan to buy S-400 missile systems from Russia.

India is the world’s largest importer of oil, and Iran is one of its major sources of supply. When a previous US regime imposed sanctions on Iran, it had granted India a waiver. India has made heavy investment in the Chabahar port in Iran and is due to get operational control of a part of it next month. It views the new port as its doorway to Central Asia.

Under a US law, the proposed purchase of Russian missile systems will also invite sanctions. India, however, plans to go ahead with it, expecting a waiver. There are reports that waivers will come, but with conditions requiring India to scale down oil purchases from Iran and gradually reduce purchase of weapons from Russia, which has been the country’s major source for military hardware since the Soviet days.

India and the US have several issues to sort out. They are not all related to military ties. Some are trade issues. India has a favourable trade balance with the US, and Washington wants New Delhi to increase purchase of oil and gas and aircraft to wipe it out.

A joint statement issued after the 2+2 said that, apart from defence and trade issues, the ministers discussed cooperation in fighting terrorism, creation of “free, open and inclusive Indo-Pacific region” and promotion of sustainable debt-financing in the region.

The last two issues have a bearing on China. One reflects the two sides’ concern over Beijing’s assertion of its growing clout and the other the fear that the countries which are becoming part of its Belt and Road Initiative may get drawn into a debt trap.

As Indian ministers Nirmala Sitharaman and Sushama Swaraj met with Defence Secretary James Mattis and Secretary of State Michael R. Pompeo, China welcomed the dialogue. It, however, made no comment on the security pact.

Some analysts have drawn attention to the one-sided nature of the dialogue with the US laying down the rules and India acquiescing in them. The Communist Party of India (Marxist) was the only opposition party to express any views on the Indo-US security pact. It said the agreement would compromise India’s defence communications network and bind it down to buying military equipment from the US. 

Does the silence of the other parties mean they are quite willing to go along with the govenment? It is more likely they are too engrossed in parochial matters to apply their minds and come to clear conclusions on it. --Gulf Today, Sharjah, September11, 2018

Court stalls crackdown
BRP Bhaskar Gulf Today In a swift, unprecedented intervention, the Supreme Court last week denied custody of five human rights activists, well-known for their devotion to the cause of tribals and other oppressed communities, whom the Maharashtra police had picked up from different states on conspiracy charges. Police teams from Pune had raided the residences of the activists in Mumbai, Thane, Delhi, Faridabad and Hyderabad simultaneously and arrested them. They obtained permission from local magistrates to take Telugu poet and Marxist ideologue Varavara Rao from Hyderabad, former university professor Vernon Gonsalves from Mumbai and writer and cartoonist Arun Ferreira from Thane with them to Pune. However, High Courts blocked the paths of the teams that arrested prominent woman lawyer and trade unionist Sudha Bharadwaj at Faridabad in Haryana and journalist Gautam Navlakha in Delhi. On a petition filed by eminent historian Romila Thapar and four others, the Supreme Court held an urgent hearing and passed an interim order directing the police to keep the arrested persons in their own houses until September 6 when it will hear the matter. The police had to send back to their homes those whom it had taken to Pune. Some activists whose houses were raided were not taken into custody. According to the Pune police, the arrests were made in connection with the violent incidents at Bhima Koregaon where a large number of Dalits had congregated on January 1 to celebrate the victory of British-led Mahar (a Dalit community) soldiers of the East India Company over the army of the caste supremacist Peshwa regime in 1818. Dalit icon BR Ambedkar had led his followers to Koregaon in 1927 to commemorate the event. Since then Dalits have gathered there on New Year’s Day every year to mark the occasion. Being the 200th anniversary of the war, this year’s event attracted a large crowd. Some residents of the area, resentful of Dalit assertion, attacked the celebrants in the streets. One person was killed and several were injured. A first information report registered with the police named Sambhaji Bhide and Milind Ekbote, two leaders of the powerful Maratha community. Ekbote was arrested and released on bail. There was no action against Bhide, whom Prime Minister Narendra Modi had honoured with a visit during his election tour of 2014. The day before the celebration a big public meeting, styled as Elgaar Parishad, was held at the Shaniwarwada fort in Pune to protest against attacks on Dalits in different parts of the country. The speakers included Gujarat Dalit leader Jignesh Mevani, MLA, and Jawaharlal Nehru University student leader Umar Khalid, both of whom have emerged as faces of resistance to Hindutva advance. On a complaint filed by a businessman alleging the speakers had tried to promote hatred among sections of society the police registered a case. Six months later, in June, the police arrested five activists, Surendra Gadling, Mahesh Raut, Sudhir Dhawale, Rona Wilson and Shoma Sen, who, it said, had organised the meeting. Initially, the police saw no link between Elgaar Parishad and the Koregaon violence. Now they are seeking not only to connect them but also to link them with an alleged Maoist conspiracy involving the 10 activists arrested so far. It alleges there was even a plot to kill Modi and overthrow the government. It appears the Maoist conspiracy theory was first articulated by a retired army officer in a paper prepared for a think tank, named Forum for Integrated National Security (FINS). Bharatiya Janata Party general secretary Seshadri Chari is one of the conveners of the Forum, which is based in Mumbai but has an office also in Pune. Activists have been a bugbear of Modi since they played a big part in bringing to light the anti-Muslim riots which occurred in Gujarat soon after he became the Chief Minister. One of his first acts as Prime Minister was to block sources of funds of an NGO which led the effort and launch cases against its founder, Teesta Setalvad. The Pune police could not satisfy the High Courts about the charges against the activists. Its theory about Elgaar Parishad was punctured by former Supreme Court judge PB Sawant and former Mumbai High Court judge GB Kolse Patil who said they had organised the event at their own expense. One question begs for an answer: if there was indeed a conspiracy involving people in different states why is the investigation left to a district police and not to a national agency? Meanwhile, the Hindutva camp, aided by compliant media, is propagating the concept of a new “other”, nicknamed Urban Naxal.-- Gulf Today, Sharjah, September 4, 2018.