Reliance Defence issues clarification about Rafale deal

In response to the editorial “Rafale deal: Govt has questions to answer” published in this newspaper on November 25, Reliance Defence has sought to suggest that it does possesses expertise in the area of producing for the defence forces. In a clarification, the company noted that in 2011, Reliance Naval and Engineering Ltd, based in Pipavav, Gujarat, was awarded a contract for five Indian Navy warships through a competitive process and that last year it had also won a contract for 14 Fast Patrol Vessels and Training Ships through competitive bidding.

It also said Reliance Infra, with 100 per cent stake in Reliance Defence, was a registered vendor with the Ordnance Factory Board and the Defence Research and Development Organisation, and that it recently won a contract for the fabrication of hull and turret for the Arjun tank, through competitive bidding against major Indian defence companies.

It did not, however, cite any contracts on combat aircraft manufacture. The editorial had stated that Reliance Defence’s “track record in the field was too new to inspire confidence”.

The company noted that in his personal capacity Mr Anil Ambani “had never made any statement”, and that a statement issued by the company “had NEVER mentioned that there was no need for the CCS to clear the Rafale deal”. Instead, Reliance Defence clarified that the government policy issued on June 24, 2016 allows for 49 per cent FDI in the defence sector under the automatic route, without any prior approval. “Therefore, no approvals from the Union Cabinet or CCS were required for the formation of a joint venture company between Dassault Aviation of France and Reliance Defence Ltd for the execution of an offset obligation against the Rafale deal,” it said.

The Reliance Defence statement has sought to highlight the fact that foreign participation in the defence sector “has been in vogue since 2001” and there had been multiple changes since then and many joint ventures had been formed between Indian companies and their foreign partners.

The editorial did not suggest that foreign participation in the defence sector was a novelty in the Rafale case, and focused only on the rule introduced in June 2016. The editorial stated: “The question is: was the rule for Dassault to have a new Indian private sector partner introduced to specifically benefit Reliance Defence Ltd?” The company’s statement has called this question “absolutely baseless”.

 asianage