The Rafale Plane Controversy - Recent Setbacks in India's Attempt to Modernize its Air Force

For over a decade, India has been in the process of modernizing their air force. In 2007, the United Progressive Alliance (UPA) government in India decided to purchase 126 combat aircraft for the Indian Air Force, and in January 2012 announced that the Rafale jet, manufactured by Dassault Aviation, was the winner of the security contract. However, following a change of government in India in 2014, with Narenda Modi coming to power, the previous agreement was scrapped for an alternative deal of Modi’s making, which has generated massive amounts of political controversy within India. Recent comments by Former French President Francois Hollande have reignited accusations that the Modi government engaged in cronyism.

The original deal was for India to purchase 126 aircraft. The UPA government planned to purchase 18 “off-the-shelf” jets, meaning fully built from Dassault Aviation while the remaining 108 jets were to be assembled in India by state-run Hindustan Aeronautics Limited. The cost was reported to be around $10 billion.

However, frequent delays prevented the deal from being concluded, and after the election of Prime Minister Modi in 2014, the total price for the aircraft rose to $14.4 billion. Faced with even more delays, Modi decided a new deal was preferable. During a visit to Paris in April 2015, he announced new plans to purchase 36 “off-the-shelf” Dassault Rafale jets, along with a superior weapons package and logistical support. The deal was concluded in September 2016, for an alleged price of $8.7 billion. According to defense analyst Ajai Shukla, this figure was confirmed by a “senior political leader” in the National Democratic Alliance (NDA), Modi’s party. This new deal a provoked substantial political outrage in India for a variety of reasons.

Immediately the Congress, the main opposition party led by Rahul Gandhi, launched a wide series of attacks aimed at the Modi administration, claiming the new deal’s increased price per jet was an “insurmountable loss” of the taxpayers’ money. The Congress alleged that each aircraft was three times more expensive compared to the previous deal and accused the government of conducting shady dealings with taxpayer money. Modi’s Defense Minister Nirmala Sitharaman responded to this criticism by claiming that the deal was transparent, and that it came with a superior weapons package and increased logistical support, two things that had been absent in the previous deal. However, Sitharaman has told Parliament that the details of the deal, including the price per jet, cannot be revealed due to national security concerns, as it would reveal its capabilities.

In addition, the Congress claimed that the company Reliance Defence Limited had been unfairly selected to be Dassault’s Indian partner in the deal. Reliance Defence has denied these allegations and said they had formed a joint venture with Dassault – Dassault Reliance Aerospace – with no Indian government intervention. The announcement of Reliance as the Indian partner came as a surprise as the Reliance conglomerate had no previous experience in the aeronautics industry. Allegations of cronyism soon arose as Reliance is owned by Anil Ambani, a man close to Modi. This highly lucrative new venture is expected to earn over $2 billion in new revenues. India’s defense ministry has maintained the stance that neither the Indian government nor the French government had any say in the commercial decision for Dassault to partner with Reliance. The French government has made statements in line with Modi’s stance, citing a security agreement from 2008 between the two nations.

However, recent comments by Former French President Francois Hollande have renewed the political uproar in India. It had recently come out that the Reliance conglomerate had partially financed a film produced by Julie Gayet, Hollande’s girlfriend, in 2016. Faced with accusations of a conflict of interest, Hollande responded by claiming that the Indian government gave no choice to Dassault in terms of partners; they had to work with Reliance Defence Limited. Denials of this have come from both Dassault Aviation and the Foreign Ministry in Paris, but opposition parties in India continue to use Hollande’s statements as evidence of cronyism by Modi’s government.

Despite this purchase of 36 new jets, many analysts continue to believe that India’s military lags behind its closest rivals, namely Pakistan and China. China continues to sell to Pakistan increasingly sophisticated military technology, while heavily investing in its own military. In contrast, India took over a decade to improve its Air Force, and even then it reduced the deal by 90 fighters, causing some critics to accuse Modi of compromising national security with this reduced deal.  

Moving forward, it is important for India to not only address its military, but how it addresses these problems. The process of improving the Air Force took over a decade and resulted in significant internal political turmoil. For India to remain on par with its military competitors, India must improve its decision making when it comes to these sorts of purchases crucial to national security.