Rafale deal: How much does it cost and other questions govt should answer

The Rafale combat aircraft deal between India and France, which aims to arm the Indian Air Force (IAF) with 4.5 generation platforms, is the "biggest scam" of the Modi government, the Congress said on Wednesday, demanding a white paper on the acquisition. 

In a written statement on Wednesday, the ministry of defence rebutted what it calls "unfounded allegations" and "misleading statements" on the 2016 agreement between New Delhi and Paris to buy 36 fully-built Rafale fighters. However, the statement does not offer any figures.  

Questioning PM Modi again about the Rafale deal on Wednesday, Congress President Rahul Gandhi asked, "Was there any theft in the Rafale deal? Please answer in yes or no. He should clearly tell the nation that after he changed the contract after visiting Paris. Did you (Modi) consult the Cabinet committee on security? Yes or No. And how much have you paid for each aircraft?" 

The Congress leader also attacked Defence Minister Nirmala Sitharaman and said, "She says that we won't tell the country about the deal. This is the country's biggest defence deal and she is saying that we won't tell the nation about it as it is a secret."

"We just want to know did you yourself change the deal? Did you give more money or less? And did you take the permission from the Cabinet committee or not?" he asked, adding, "The questions are very simple, but we are not getting answers." 

Sitharaman had promised on November 17 to provide the figures, but on Monday declined to do so, citing a “confidentiality agreement” signed with France.

Defence analyst Ajai Shukla has unpacked what the various statements on the deal mean and what it might cost the Indian taxpayer: 

1) Undue benefit to Anil Ambani?

The Congress alleges Dassault, which builds the Rafale, is being paid far more than the price earlier negotiated. And, that largesse, in the form of defence offsets, is flowing to Reliance Defence, headed by Anil Ambani, a Gujarati industrialist with no experience in aerospace manufacturing but perceived to be close to the PM.

The BJP's riposte, delivered by Defence Minister Nirmala Sitharaman, accuses the Congress of delaying the Rafale procurement for 10 years during 2004-14, while heading the United Progressive Alliance (UPA) government. Sitharaman says that Modi, worried about a precariously under-equipped IAF, boldly went ahead in the national interest, following all procedures, to buy the Rafale. 

(Click here to find out the four questions the BJP still needs to answer on the Rafale deal)

2) How much does Modi's Rafale deal cost?

Fortunately, authentic figures are available for the €7.8-billion contract, signed in 2015, for 36 Rafales. Soon after the contract was signed, a senior political leader in the National Democratic Alliance (NDA) held an off-the-record briefing in New Delhi for several journalists.

It was divulged that the contracted price averaged out to €91.7 million (Rs 686 crore) per Rafale. This included the purchase of 28 single-seat fighters, for €91.07 million (Rs 681 crore) each; and eight twin-seat fighters, each priced at €94 million (Rs 703 crore). That puts the cost of each of the 36 “bare bones” fighters at €91.7 million (Rs 686 crore) — totalling up to €3.3 billion.

Besides this, the IAF paid €1.7 billion for “India-specific enhancements”, €700 million for weaponry such as Meteor and SCALP missiles, €1.8 billion for spare parts and engines, and €350 million for “performance-based logistics”, to ensure that at least 75 per cent of the Rafale fleet remains operationally available. All this added up to another €4.5 billion, taking the cost of the contract up to €7.85 billion.

(Click here to find out all the details of the deal's cost)   
 

3) Divulging cost details would compromise national security?  

In a written statement on Wednesday, the defence ministry rebutted what it calls “unfounded allegations” and “misleading statements” on the 2016 agreement between New Delhi and Paris to buy 36 fully built Rafale fighters.

The statement does not offer any figures about how much India is paying for the various components of the deal – a key demand of the political opposition. Defence Minister Nirmala Sitharaman had promised on November 17 to provide the figures, but on Monday declined to do so, citing a “confidentiality agreement” signed with France.

The ministry statement indicated that supplying details would reveal the Rafale’s capabilities, compromising operational secrecy. 
 

“The approximate acquisition cost of the Rafale aircraft has already been provided to the Parliament. Provision of exact item-wise cost and other information will reveal, inter alia, details regarding the various customisations and weapons systems specially designed to augment the effectiveness and lethality of the assets, impact our military preparedness and compromise our national security,” said the ministry.

(Click here to read why the government says it cannot reveal cost details)