 Welcome to NewsClick. Today we will be revisiting the Rafale fighter jet issue which we have covered in the past and now that NewsClick has been sent a legal notice by Reliance Anil Dhirubhai Ambani group through its solicitor. We want to make it very clear that in public interest, NewsClick's search for truth will continue and will persist with our inquiry and wherever it takes us. So, to discuss it today, once again we have with us D. Raghunandan who has, who is a defense expert, particularly given his expertise in aeronautics engineering and his work with Hindustan aeronautics limited in the past, it becomes even more important to discuss the matter with him because he is written and talked at length on this on this matter in the past. Welcome Raghunandan. We are going to revisit this issue because I think in the light of the public statements that have been issued by the company, it becomes even more important that we at least clear the dust and come down to the brass tracks where the real issues are concerned. So, I will begin with asking you that the letter that was the public statement that has been issued yesterday makes it very clear that the present offset servicing obligation does not have anything to do with manufacturing of the 36 fighter jets, either the 36 fighter jets or future production of these fighter jets in India. Given this fact and which is what we have been talking about at length, the real issues have been diverted from. What I mean is that the real issue to begin with was to buy 18 and manufacture the rest in order to create defense indigenous capability in the field of air. Would you take us through this whole past and the reasons why we went into it before we come to this whole controversy over the offset? Well, very briefly India had first put out a request for proposals for a multi-role combat aircraft. India had not specified their weight or the number of engines they would have etc. But after some time had elapsed that same request was changed to a medium multi-role combat aircraft thereby specifying that it could be a medium weight aircraft which in a sense ruled out the single-engined aircraft. But when the tenders were then invited, they were shortlisted leaving out the single-engined aircraft going earlier, leaving the three twin-engined aircraft out of which the FA-18 Super Hornet was ruled out as being perhaps too old and not suited for what the Air Force wanted, leaving the Eurofighter and the Rafale. And extensive field trials were carried out based on different conditions available in India, the kind of profiles of flight the aircraft was expected to be put through. And based on that decision was taken to float the actual tender for 126 mm RCA and between the Eurofighter and the Rafale after these extensive field trials were undertaken the Rafale was chosen as the preferred option. So that is where things stood and this number of 126 was specified by the Air Force, agreed to by the Defense Procurement Council, agreed to by the Union Cabinet when suddenly overnight the Modi government decided to scrap the earlier tender on the grounds that price negotiations were not headed in the right direction that there was no solution to it and decided to purchase 36 Rafales outright. Why are the numbers so important? Well, to put it simply, India had been experiencing a shortfall in the total number of fighter aircraft available to the country basically because of the obsolescence of the MiG-21 aircraft and after which you had had a series of acquisitions of small numbers of other aircraft. You had the Mirages, you had the Jaguars, but the numbers that you wanted which were earlier being provided by the MiG-21s you did not have those numbers anymore and the indigenous LCA was not quick enough in coming to development which could substitute for the MiGs and therefore the Air Force was finding it hard-pressed to meet its requirement which it had placed at 42 squadrons and given the rates of obsolescence it was looking as if India would be heading for an Air Force strength of only 26 or 27 squadrons down the road which is why then 126 aircraft were called for Rafale. Now, so obviously it was something which was in tune with the strategic assessment and it was to meet that the possibility of war scenarios, two-war scenarios that settled for this number so the number is very important. The number is critical in fact and even today the Air Force is reiterating its requirement of a squadron strength of 42 squadrons and even with the acquisition of 36 Rafales which is just two squadrons they are going to be left a 10 or so squadrons short of what they would be looking for which is why ironically having scrapped the earlier tender for a 126 aircraft having reduced it to a straight outright purchase of 36 whereas the 126 were to be acquired through 18 acquired by purchase and the remaining aircraft to be manufactured in India by 108 to be manufactured in India. Now with 36 being bought outright there is no Indian manufacture there is no Indian acquisition of technology but having gone through all that and cancelled the deal for 126 in favour of a 36 aircraft deal the government has once again floated a request for proposal for another 100 plus aircraft which meant which means that that requirement for a 100 and odd aircraft still remains. Okay, so if you come to the offset part of it it's very clear that by reducing the number you are actually reducing your capacity to negotiate a better bargain with the company from which you are buying the capital right which means that we have weakened the case in so far as that is concerned but if you look at the present scenario of how the offset is going to be serviced where it seems that Reliance the Anil Dhirubhai Ambani group is looking for cornering up to 21,000 crore rupees through its two joint ventures one with the salt and the other with tails because the bulk of the offset would be serviced by the salt of 15,000 crores followed by tails of rupees 6,500 crores and it's only after that Safran and MBRD would be servicing a roughly 8,500 crores that amount of it. So given that how do you look upon if you have looked at what they plan to do what do you make of it? See it's very clear that if you are purchasing only 36 aircraft and that too you have specified that these are going to be in a flyaway condition. A very significant part of the aircraft cannot be manufactured in India so the offsets because it's a mandatory requirement will somehow have to be done in such a way that some manufacturing would be done here maybe for towards these 36 maybe not towards these 36. Well the company statement says that it has no part it's 100% would be manufactured in France and brought here. So what seems to be now being done is you somehow have to justify spending 50% of the contract within India which is done in one way or another but may not have anything to do with the Rafale deal itself. I have read statements to the effect that and this is something which I have been saying on this on our channel that it's very surprising that the Ambani group and some of the other groups selected for the offsets are groups which have virtually no experience not only in aeronautical manufacture but in any kind of manufacturing business and I have read statements to the effect that the Ambani group have said that this is irrelevant since the Rafale is not going to be manufactured here but my question is even if Rafale is not being manufactured if other aeronautical components are being manufactured here my argument would still apply that this is a group with no experience in those matters and therefore I find it surprising that that's all would have selected this group on its own unless they have been nudged in that direction. So there seems to be a lot more that needs to be probed and looked at and one final question before we conclude today's interview. There are other companies also I mean the public statement by the company Reliance company has also pointed out that there are hundreds of other companies that are going to be partners but if you look at the joint ventures that have been signed in which there is Bharat Electronics Limited also with Thales Corporation which is part of the Rafale project and some other companies what do you think would be the size of the offset which would be serviced by the Reliance group through its joint ventures and by others do you have any idea of what would be the size of it? I cannot say authoritatively since no figures have been put out. The company claims that they will only be servicing 25% which seems extremely doubtful. Well it could be if you remove some of the radar components if you remove some of the electronic warfare components there's a significant component of the offsets which relate to the design development of the Kaveri engine which has also been added to this which has been added as part of the same deal which is going to be between SNECMA, the engine manufacturer and Hindustan Aeronautics the two of them have had a long collaboration but this preceded the Rafale project. So you see the point is that once you configure offsets purely as a monetary transaction rather than as a technological transaction then all these things start happening then you want to find some justification so you can start making tires in this country and show them against offsets but it will not serve the purpose of acquiring technologies or as in this case you've got a Kaveri engine development going on so you tie up with a similar jet manufacturer and show it against this project because you have to build up that amount to 50%. But one final question before we conclude today is that they does raise a question Raghu that if the number of fighters is going to be less than what it was about the IAF wanted then it does raise a question that what happens to national security assessment threat assessment threat scenario I mean that it can be given a go-by without any discussion or debate. To me that is the most amazing part of this Rafale deal which defies any explanation and with all these charges and counter charges taking place now till date I have not come across any justification by the government given for suddenly changing a 10-year-old decision for a requirement for a 126 aircraft suddenly to reduce it to 36 and then to find two years later another contract for a 108 aircraft being put out which shows that that strategic assessment has not changed as far as the Air Force is concerned which then still leaves this huge question mark about why it was reduced to 36 in the first place. The point I want to make is India has gone through a decade or more of tinkering with difference procurement rules precisely to bring in more transparency. In this deal we have found that this entire exercise has been thrown to the winds and all transparency is gone because those same defense procurement rules have been thrown aside in favor of a government to government deal. Thank you Raghu for today we will be revisiting this issue again and again because it is in public interest to know especially because it deals with the military sector and national security as the company itself makes it very clear which obliges us in the news click to pursue this matter which we will continue to do. We would love to have your feedback on this interview if you have anything to say write to us thank you very much for watching news click.