New Delhi: Prime Minister Narendra Modi is facing allegations his administration acted improperly on a multi-billion dollar warplane contract with France, keeping alive a controversial issue that could dent the ruling party’s reputation as it heads to elections next year.
Francois Hollande was President when Prime Minister Narendra Modi visited France and signed an $8.7 billion deal for Dassault Aviation Rafale aircraft in 2016. He told French news site Mediapart.fr that his government was told to partner with a specific Indian firm, Reliance Group, for additional “offset” investments.
The remarks from the former French leader contradict what PM Modi’s government, the current French government and Dassault have said previously about the selection of Indian business magnate Anil Ambani’s Reliance Group.
“The Indian government proposed this partner and Dassault negotiated with Ambani,” Hollande said, according to the report posted September 21 that referred to the Ambani family, who are dominant in the Indian business world. “We were given no choice, we took the partner which was appointed.”
The administration of Emmanuel Macron and Dassault both issued statements after Hollande’s comments saying the choice of Reliance Group was made by Dassault. The French government says it played no role in Dassault’s selection of Reliance. Dassault said the first contract was a government-to-government contract, and that the company then picked Reliance for their partner in a separate offset contract.
However, the former French President’s comments appear to bolster long-standing allegations from the opposition Congress party that India’s Prime Minister executed a deal that unduly benefited the Ambani family – which includes Anil Ambani’s brother Mukesh Ambani, Asia’s richest man. Ahead of India’s 2019 general election, in which Modi’s Bharatiya Janata Party will campaign on its pro-poor policies and economic development record, the allegations of impropriety against the government could provide fuel to opposition critiques that the prime minister is too cozy with tycoons.
“If these developments are true, the BJP could suffer a major political blow, especially with elections just around the corner,” said Michael Kugelman, a senior associate for South Asia at the Woodrow Wilson Center in Washington, DC “Hollande’s revelation undercuts the image that the BJP likes to project of itself as a squeaky-clean party. More broadly, the possibilities of New Delhi doing a favour for a pro-government corporate titan in the high-stakes, big-money world of arms sales – the optics are dreadful, and the reputational costs for the government could be considerable.”
