Agreement Between Dassault And Reliance

Defence Minister Nirmala Sitharaman said in June: „Let me make it very clear that no offset contract has yet been signed. If two private companies come together, the ministry does not have permission to do so. And if it fits with the DIPP`s policy, they continue to do so. To think that this is related to the intergovernmental agreement on the purchase of Rafale is simply unfounded. „And in an intergovernmental agreement, there is no mention of sole proprietorships,“ she said. On the eve of Sitharaman`s visit, the French investigative site Mediapart cited notes from a meeting between Dassault management and employee representatives describing the choice of Reliance as „mandatory and mandatory“. On 31 January 1012, the Indian Ministry of Defence announced that Dassault Rafale had won the MMRCA competition for the supply of 126 aircraft to the Indian Air Force, as well as an option for an additional 63 aircraft. The first 18 aircraft were to be built entirely by Dassault Aviation and the remaining 108 aircraft were to be manufactured under license by Hindustan Aeronautics Limited (HAL) with technology transfer from Dassault. Rafale was chosen as the lowest bidder based on life-cycle cost, which is a combination of acquisition costs, 40-year operating costs and technology transfer costs. [3] Negotiations with Dassault dragged on due to a disagreement over the warranty of the aircraft manufactured by HAL. India wanted Dassault to ensure the quality of the aircraft produced by HAL, but Dassault refused to do so. [4] [5] In January 2014, it was reported that the cost of the deal had escalated to $30 billion ($1.86 trillion), with each aircraft costing $120 million ($746 billion).

[6] In February 2014, Defence Minister A. K. Antony stated that the life-cycle costing procedure would be reviewed and that the contract could not be signed during the 2013-2014 fiscal year due to budgetary constraints. [7] In March 2014, HAL and Dassault signed a work-sharing agreement for the management of licensed manufacturing. [8] After the Indian parliamentary elections of April/May 2014, the National Democratic Alliance, led by the Bharatiya Janata Party, took control of the government of the United Progressive Alliance, led by the Indian National Congress. The agreement contained a 50% „offset clause“, which the parties to the agreement, primarily Dassault, Thales, Safran and MBDA – committed 50% of the market value (about €3.9 billion, or €30 trillion) to reinvest in India, with 30% of the total (about €1.2 billion, or €9 trillion) reserved for the Defence Research and Development Organisation (DRDO). [20] [23] Of this 50%, 74% (about €2.9 billion, or €22.2 trillion) is expected to come from the purchase of goods and services from India, which should support the government`s efforts to promote Indian defence producers. [24] (Saint-Cloud, France, October 10, 2018) – As part of the September 2016 intergovernmental agreement between France and India, Dassault Aviation sold 36 Rafale aircraft to India. .

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