Sitharaman was answering a question raised by Congress MP Sanjay Singh about whether Dassault Aviation entered into a joint venture with Reliance Defence, “a company having no prior experience in manufacturing equipment for jets” as part of the Rs 58,000 cr deal.
Sitharaman said there was no requirement for the French company to enter into a deal with the Anil Ambani company to fulfill its offset commitment to make 50% of the components in India.
Instead, she said, the French company can purchase the components from any Indian company or transfer the technology to make the components to government organizations like the Defense Research and Development Organization or DRDO.
“The avenues for discharge of offsets include direct purchase of eligible products, Foreign Direct Investment (FDI) in joint ventures, direct purchase through investment in kind in terms of Transfer of Technology (ToT), equipment, provision of equipment or ToT to government institutions including DRDO and technology acquisition by DRDO,” she said.
The choice of how it wanted to achieve the offset commitment, and its partner in India, was up to the French company, she added.
“The vendor or the Original Equipment Manufacturer (OEM) is free to select Indian offset partners,” she claimed.
The deal, which was being negotiated under the previous Manmohan Singh government, but was finalized under the present Narendra Modi government, has come under much attack by the opposition.
The Congress Party said it was looking for deal to buy 126 Rafale fighter jets. Of these 18 Rafale fighter jets were to be delivered by the French company in flyaway condition, while the rest (108) were to be manufactured in India at the Hindustan Aeronautics Limited.
The whole thing would have cost only Rs 79,200 cr, Congress Party claims.
Instead, the Modi government has agreed to pay Rs 58,000 cr to France to buy 36 jets in ‘fly away’ condition, which makes less economic sense and causes a loss to India.
This has been countered by the Modi government using two arguments.
First, it said that the French company was not ready to transfer the manufacturing technology to Hindustan Aeronautics Ltd, and therefore, the plan to make the jets at HAL’s factories at a lower cost was impossible.
Secondly, Indian Airforce chief Birender Singh Dhanoa and others have said that the French have refused to share the manufacturing technology with HAL, but were willing to share it with the DRDO.
Sitharaman has also said that 126 Rafale jets will be manufactured in India under future deals.