Namaskar friends! I have explained Rafale deal.! Oh! Sorry! Typo! Typing Error!! Friends you’ve actually misunderstood me, and made a typing error. I meant to say that I ‘will’ explain Rafale deal in this video. For a long time, you guys have been requesting a video on this topic. So finally in today’s video I will like to explain this. This topic has been complicated and blown out of proportion so much that you get various opinions from everywhere. In this video, I will not give my opinions. I will simply state the facts as they are. And I want you to form your own opinions after knowing the facts. Come let’s see. This story starts on 28th August 2007, when our Defense Ministry accepted proposals for 126 MMRCA fighter jets. MMRCA stands for Medium Multi-Role Combat Aircraft fighter jets. We needed to buy fighter jets so various companies submitted their bids. In May 2011, two aircraft were shortlisted. Eurofighter and Rafale aircraft. Negotiations started in January 2012, with Dassault Aviation for Rafale aircrafts. Because their bid amount was the least. The deal was to purchase 126 fighter jets. Of which 18 fighter jets were supposed to be ‘ Off The Shelf’. That is they were supposed to be manufactured in France. And they would have been ready to fly as soon as we got them. And the remaining 108 fighter jets were supposed to be manufactured in India. By Hindustan Aeronautics Limited (HAL). Dassault Aviation, the French company, was to transfer its technology to HAL. It is known as ‘Technology Transfer’. In which the company shares the information on how the fighter jets could be manufactured in India. Using this technology, HAL would have manufactured the remaining 108 fighter jets . Technology Transfer was an important aspect in the deal because, if in the future the relations between India and France take a bad turn or if Dassault Aviation could not manufacture aircraft, even then we could have made the aircraft ourselves in India, which would have been similar to the Rafale aircraft. In March 2014, Dassault Aviation and HAL signed a ‘Work Share Agreement’ which stated that 70% of the work to manufacture the 108 aircraft in India, was to be undertaken by HAL and the rest 30% by Dassault Aviation. The negotiation took a long time as the two companies could not agree on several points. During this time our Government changed and the negotiations were still not finalized. Finally, on 25th March 2015, Dassault’s CEO Eric Trappier said that the paper work was 95% completed. He said, “You can imagine my satisfaction to hear from the HAL chairman that we are in agreement for the responsibility sharing…” He said that the deal will be signed soon enough. On 8th April 2015, our Foreign Secretary said that negotiations among Indian Government, HAL, and Dassault’s are still not over. After two days PM Modi went to France and suddenly on 10th April 2015, a joint statement was issued by the Indian and French Governments that a new deal will be struck. As per the new deal, 36 Rafale aircraft were to be purchased by the Indian Government all of which in Fly-Away Off The Shelf condition. The opposition questioned this move as PM Modi finalized this deal without the approval of the Cabinet Committee on Security. What happened to the old deal? Which included 108 aircraft to be manufactured in India by HAL. On 13th April 2015, then Defense Minister Manohar Parrikar said that, “PM Modi took the decision and I backed it up.” After this, on 23rd September 2016 an Inter-Government agreement was finalized and signed. What’s interesting is that only a few a days before PM Modi’s France visit on 25th and 28th March 2015 , two new companies were founded, Reliance Defence Ltd. and Adani Defence Systems and Technologies Ltd. It’s also interesting that under the new deal, India and France issued a joint statement on 10th April, in which it was stated that ‘the aircraft and associated systems and weapons would be delivered under the same configurations as had been tested and approved by the Indian Air Force. The aircraft of the new deal were to be of the same configuration as under the previous deal. This is the logical interpretation of the joint statement. Before we move ahead let’s understand what is an Offset Clause. If you agree to purchase this pen from me for ₹100, then I’ll give you the pen and you’ll pay me ₹100. But if we agree that of the ₹100 that I am getting, I will invest ₹50 in your company, that is an ‘Offset Clause’ in our contract. Offset clause is a requirement under which the supplier is bound to spend part of the money in a specific place decided by the buyer and supplier. In the new Rafale deal there is an offset clause for 50% of the value. The deal is worth ₹60,000 crores, which means India will buy fighter jets from Dassault for ₹60,000 crores. Out of it Dassault has to invest 50% of it, ₹30,000 crore, in India. Technically it should be up to Dassault, to decide in which Indian companies it wants to invest. On 3rd October 2016, Anil Ambani’s Reliance group started a joint venture with Dassault Aviation. Dassault Reliance Aerospace Ltd. On 21st June 2017, a report in Hindu Business Line stated that of the ₹30000 crore offset money, Dassault is planning to invest ₹21,000 in the joint venture. This is the reason why the opposition, Congress and Rahul Gandhi repeatedly question this deal and accuse the Government of favoritism towards Anil Ambani’s Reliance Defence Ltd. On 21st September 2018, the controversy blew up when the ex French President François Hollande who was the President from 2012 to 2017. said that the Modi Government chose Anil Ambani as the offset partner and the French Government had no choice in it. Dassault responded to it, saying that it chose Reliance of its own accord. The present French Government says they have nothing to do with the deal as it was finalised by Dassault and Reliance. On 13th September 2018, our Defence Minister, Nirmala Sitharaman said, that the Government had not given any suggestion to Dassault and they chose Reliance on their own. 21 October 2018, Dassault’s CEO said that only 10% of the offset obligations is supposed to go to Reliance. The rest of the offset money will be invested in more than 100 companies. This directly contradicts the report of the Hindu Business Line and reports of other journalists who said that ₹21,000 crore is to be paid to Reliance. Who’s speaking the truth? How much money will go to Reliance? This will be clear for all to see when this offset obligation will start being implemented. We’ll know for sure then who’s telling the truth. But for now, Dassault has confirmed that a minimum investment of ₹800 crore will be put into the joint venture with Reliance, as you can see here. The next controversy about the Rafale deal is about its cost. Congress spokespersons say that cost of the old deal was ₹54,000 crore, the average cost for each plane was somewhere between ₹520-570 crore. Rahul Gandhi and Congress spokespersons claim the cost was ₹526 crore per plane, to be exact. On 13th April 2015, the then Defence Minister, Manohar Parrikar said, that the cost of 126 Rafale aircraft would be ₹90,000 crores. It includes the cost of Technology Transfer, manufacturing infrastructure and even the cost of additional parts that were to be included in the aircraft. This took up the average cost up to ₹714 crore per plane. Moving on to the new deal. The cost for the new deal will be ₹59,000 crore for 36 fighter jets. That is ₹1638 crore per plane! This creates all the controversies. Congress asks how did the cost per plane jump up to ₹1638 crore from ₹526 crore? Almost thrice the original amount. Even if Manohar Parrikar’s calculation of the cost per plane is considered, ₹1638 crore is still a much larger price than ₹714 crore What’s the reason for it? On 18th November 2018, the Junior Minister of Defence said in the Parliament, that as per the new Rafale deal the cost per plane is ₹670 crore, but it increases to ₹1638 crore because, they include the cost of other items such as weapons, maintenance and spare parts. Our Government tell us the total cost of the deal and the basic cost per plane. Other than these, the Government does not disclose the details of specific expenditure on weapons, maintenance and spare parts. The Defence Minister and the Government cite national security as the reason for not revealing details. An important thing that needs to be understood is, out of the 126 aircraft of the old deal, 108 were supposed to be manufactured in India, which could have brought down the cost of production. So we should actually compare the prices of the ‘Off The Shelf’ planes. 18 from the old deal verses 36 from the new. That would be fair. But our Government is not revealing the cost of the 18 planes even under the old deal. Some people suggest that we can compare the cost with the Rafale deals of other countries, Egypt and Qatar also bought Rafale aircraft. But we can’t do this accurately, because we do not have the specific details of the contracts made by those countries. On the other hand, France reveals the prices of the Rafale aircraft periodically. In 2013-14, France revealed the prices of all the models. The price of Rafale aircraft in that catalogue was between ₹500-600 crore per aircraft. If we compare with that, the price under the current deal is still way too much. Speculations and comparisons will continue till we do not have the actual details of the cost. But will we ever be told the cost or will it be forever undisclosed due to national security? Who knows? Now we come to the Supreme Court’s judgement. Four PILs were filed in the Supreme Court, demanding an investigation into the Rafale deal. On 5th Sept 2018, Supreme Court started the hearing for the case. It asked the Central Government to share, with the court, the details of the Rafale deal in a closed envelope. On 12th November, the Central Government gave the details to the Supreme Court as directed. Then on 14th December, Supreme Court gave its verdict. This 29 pages long judgment is available on the official website of the Supreme Court. I’ve put the link to this judgment in the description, you can read it for yourself. In the judgement Supreme Court has stated that, it will not interfere in the case of Rafale deal as it is outside its jurisdiction. It is not the Supreme Court’s place to investigate sensitive defence deal or advise the Government on it. “We find no reason for any intervention by this court on this sensitive issue” The case would have ended here, if there weren’t factual errors in the SC judgement. For example, the judgment states in point 25, that ‘the pricing details have been shared by the Comptroller and Auditor General (CAG) and the CAG’s report has been examined by the Public Accounts Committee (PAC) only redacted portion of the report was placed before the Parliament and is in public domain.’ But in reality, there were no such reports submitted to PAC. Neither is it available in the public domain nor has it been submitted in the parliament. Rahul Gandhi pointed it out in a press conference following the judgment Mr. Kharge is siting with me. He is the Chairman of PAC in the Parliament. After Rahul Gandhi’s press conference, our government says that the sealed envelope given to the Supreme Court stating the details of the deal, was misinterpreted by the Supreme Court judges. Which caused typing mistake in their report. They meant the say that the CAG report “will be examined by the PAC”. But it was typed “has been examined by the PAC” in the report. The government has now put in a petition in the Supreme Court to rectify the report. The leaders of opposition parties claim that the government is lying as three Supreme Court judges cannot all be grammatically wrong, resulting in the misinterpretation causing such a blunder. They also allege that the sealed envelope given to the Supreme Court contained lies. Experts believe that the Supreme Court judgement may be declared null-and-void because one of the main point is factually incorrect. It will be interesting to see what happens next. Supreme Court is now on winter holidays and it will reopen in January and a new decision may be reached. For now, Congress has demanded a Joint Parliamentary Committee be called upon to investigate the Rafale deal But Arun Jaitley said that it cannot happened. But wasn’t it the same Arun Jaitley that demanded a Joint Parliamentary Committee to investigate the 2G scam? His hypocrisy is showing through. Basically you need to understand that questions raised by the opposition is to demand a investigation into the Rafale deal. And our government is trying to avoid investigation. They do not want an investigation into the Rafale deal. Hopefully, friends, you have understood the whole debate on Rafale deal. Share this video. And if you like my work, then contribute to support my work on patreon.com/dhruvrathee so that I can keep making such informative videos for you. We shall meet in the next video friends. Thank you!