 Welcome to NewsClick. We have once again going to be discussing the Rafale controversy. New revelations are coming out. But rather than discuss all the details, we have with us Raghu, D. Raghunandan, a defence expert and a colleague in NewsClick. And we will be discussing not, we won't go into so much of details but we want to focus on the key elements of this Rafale controversy. Welcome for this interview Raghu. I like to start with raising the first query that comes to my mind, which is when the government submitted its documents before the Supreme Court, now that the matter is with the Supreme Court and they reserved their order. They said they had to go in for this deal because our neighbours, our adversaries were acquiring fighter jets of a much more modern and high-tech than what India possesses. And HAL, the South, the South's negotiations to sort out the guarantee, warranty, work share agreement remained unresolved. I'd like to ask you, Raghu, that if it is so that the security situation in our immediate neighbourhood was such that compelled the government to go in for changing a request for a proposal of 2007 to a truncated form, does it make sense to you as a defence analyst, I mean does it make sense to you that we can fill our requirement by going for a fewer number of fighter jets than what was required originally. From day one, this has been the biggest problem for any defence analyst when he looks at it, it looks patently absurd that you know that your own strength is depleting in the air force. You know that simultaneously potential adversaries in your neighbourhood are arming themselves and that the imbalance between what is required for preparedness and what you have has been increasing by the day. That is clear and that is why with all these factors in mind, the air force had carefully thought and put out a proposal to induct 126 aircraft. Now, to say that negotiations were stalled and therefore we had to go in for an emergency procurement but only of 36 aircraft does not make sense. If you thought that there was a problem in the negotiations, the first thing should have been to try to untangle those negotiations, how to get it out of the quagmire it was in, to scrap it and then go for an emergency procurement of a much smaller number does not make sense and clearly the air force also does not think it made sense because it soon put out another request for 114 fighters which then begs the question then why not have a revised 126 aircraft tender which had gone through all the procedures rather than do this mishmash of buying an emergency requirement of 36 and then going for something else. But they are also being less than truthful on this because it seems both thus all CERIC Trapia who has been giving interviews right left and center but he is also on record as well as the former chairman of Hindustan Aeronautics Ltd himself Shri Raju, T. Subarna Raju who is on, they are both on record having said that they had sorted out this problem and in fact the HALs ex-chairman said that the documents were submitted to the NDA government to the Modi government and that they should bring it out in public because it would make it very clear that the work share agreement, the question of warranty and guarantee etc etc had all been resolved. So the government in its note which it has filed in the Supreme Court has advanced two rationals behind this one was that the immediate neighborhood is there and therefore needed aircraft on an emergency basis the negotiations were stalled and therefore we had to go on why the negotiations were stalled that they have clearly and openly blamed HAL to say that this is HAL's problem. In fact it's been open season for for heating out at HAL for no rhyme reason by even serving IAF officers. Why the serving IAF officers? It's extremely unfortunate that this is being done because then for any future contract why will any foreign vendor or for your own armed forces have any confidence in your own public sector, defense public sector. One of the senior IAF officers went so far as to come out in defense of private not just private entities entering military sector but much more than coming out in defense out of Anil Ambani group and and that's all CEO Eric Trappier has also specifically stated that on the question of guarantee he has said very clearly I don't know about this problem we didn't have a problem HAL said they would give a guarantee for their thing this is a problem between them and the government of India. So my understanding of this issue is if the negotiations were stuck and the negotiations were not stuck because of a problem between HAL and that's all correct it's a problem with the government of India had with HAL then it raises an even bigger question was the prime motive just to kick HAL out of this process and then redo the process so that you can favor private sector industry that seems to be the only conclusion because it's not that's all its problem about HAL it's your problem with HAL as far as the government of India was concerned. Otherwise it would make no sense why ministers of government bureaucrats and serving Air Force officers will go out of the way to damage HAL and and come out in defense of a private party like the Anil Ambani group. That's right. Let's move to the second question that we have in our mind that that needs to be looked at little carefully. We have a defense procurement procedure 2013 the government also says that they went by the DPP 2013 when they went in for this so called intergovernmental agreement and this was a government to government deal. There are several questions that have a reason in the courts of Supreme Court hearing which raised a question about the nature of this this peculiar nature of this government to government deal. Reportedly France doesn't have a policy or a procedure laid out for government to government deal. When India swears by government to government deal and and projects this Raphael deal as being far superior to a competitive bidding they the questions that comes to our mind is that then why in a government to government deal there is no sovereign guarantee given. Why is it that in a question in if in the event of a dispute Geneva is said to be the seat of arbitration whereas under DPP 2013 it had to be New Delhi and sovereign guarantee is a must if it's a government to government deal. If it's a competitive bidding then the bank guarantee has to be provided by the vendor. Now you are negotiating directly with the vendor not with the government you are waived to core conditions of the government to government deal. So what kind of a government to government deal is it and what does it say about our defense procurement procedure then. There is two issues involved and I just like for the purposes of explanation to separate them. The first is the decision making process itself and that's what this is before the Supreme Court now is how is this decision arrived at and the document filed by the government says we have strictly followed the defense procurement procedure of 2013 of 2013 which to my mind is completely erroneous because they have listed all the steps that 2000 that the DPP requires and which were followed in the case of the 126 aircraft deal. But in this case the decision was first announced by the Prime Minister at a press conference standing next to the French president and all the other steps of going before the acquisitions council the negotiating committee the final seal by the cabinet committee on security were done post facto. What their government is trying to say which earlier also government spokesman have said is that the Prime Minister did not announce a decision he announced an intent to go in for it. This is farcical when the Prime Minister stands on the world stage sitting next to the president of France and says that we have decided to go a decision clearly has been taken the note itself says that soon following that press conference steps were initiated to cancel the earlier tender that means a decision is taken otherwise you would not have cancelled the earlier tender. So then retrospectively you have put a rubber stamp on it because the Prime Minister has made the announcement and in this government in particular who can question the Prime Minister. I think this is a very important issue because if there was a crisis which is the case that the government is making out that there was procurement going on by the neighbors that our negotiations had collapsed then it particularly needed bringing together of minds of the Air Force chief the leading bureaucracy the political leadership of the cabinet committee on security to take stock of this crisis situation and take a decision. So it is precisely that the emergency situation should have required a consultative process which is what the defense procurement procedure is rather than the Prime Minister taking a decision and then all other things following in that is first. Secondly as far as the intergovernmental agreement is concerned I think the intergovernmental agreement issue is being done in order to bypass many of the rigors which the defense procurement procedure calls for. You may seek to understand this by saying well you know India was in an emergency situation it needed 36 aircraft immediately and therefore we needed to short cut this therefore we decided to call it but if you had really wanted as I said you could have called a meeting of the defense acquisition council expedited the processes expedited clearance by the cabinet committee on security and taken a decision in any case even after the Prime Minister announced this at the press conference it took a year and a half before the final agreement was signed and then three years more for the first aircraft to get to start delivery. So I do not see how this squares with the idea of an emergency procurement and short circuiting of this. The most astonishing part of this is the absence of a guarantee of arbitration processes being outside. So the beneficiary of all this is who? Dassault because the French government has no hand. So you mean the question that can be posed is whether the government of India was doing going out of its way to help Dassault or actually catering to the needs of the country. Because in the earlier agreement Dassault would have been held accountable by guarantees by arbitration processes etc. And the government of India has given an advance of close to a billion dollars to 1.1 million euro without a bank guarantee under the guise of this is an intergovernmental agreement but the money is going to Dassault. So I do not understand why you are on the one hand favoring Dassault a private agency abroad and to favoring some private agencies in India through offset contracts. In both cases I think India is the loser. This brings me to the last question. I mean the way in which Rafale deal has progressed or rather regressed makes it very clear that if this is the way we go by then it is going to completely destroy the defence military sector which is the key. Now as a defence analyst Raghu what do you make of this? Because the question that arises is in order to accommodate because people are going out of their way to defend this deal and defend the entry of a private party despite many serious questions about its financial viability, its commitment to property, integrity, liabilities etc. Despite that if they are going out and they are willing to damn the Indian public sector. As a defence analyst how do you respond to this? See I have two problems with this. You may say I have an ideological predilection favoring public sector against private sector. Honestly I do not. If we have to have a robust defence industry no private sector organization in our country has shown evidence or capability of being able to develop the capacity required. If at all we want to develop capacity in the private sector we should be doing what has been done in atomic energy or space which is bark on the one hand in atomic energy and BHEL which has been manufacturing equipment for nuclear power plants has gradually built up a vendor base among private companies starting with components and gradually leading towards may be larger participation in manufacture. The same approach has been done by ISRO who have developed now a fairly extensive base of vendors in the private sector who are capable of supplying to it and soon they will be satellites being manufactured by the private sector for this is this way if we had gone even in the aviation sector you could have built up capacity that is in fact what the offsets were designed for originally that now is the offsets are only being looked at as financial instruments not as instruments of developing capacity and indigenization in the military sector in the military sector and the note which has been tabled in the Supreme Court starts in explaining offsets saying the main purpose is indigenization what indigenization has been done through the offsets that we are told and the government saying we have a hands-off approach to offsets this is left to the original equipment manufacturer abroad and whoever they identified here so if they identify a caterer or a panwala is that good enough would not the government want to have a say does this promote indigenization Well electric trapeze said electric trapeze believe that people have a right to start from scratch that is as far as trapeze is concerned government surely will have an assessment do these offsets enable unfortunately over the years and the latest amendment to the DPP 2013 now says you can do offsets you let us know after three years what offsets you are going to do at that stage if the government finds that this offset is not doing anything to help indigenization we can't do anything even that was done post the decision to go in for this truncated deal and it's they they try to apply it retrospectively Raghu this is enough for today thank you for today but we'll be returning to this story because it's not going to go anywhere there are too many skeletons the library here thank you for watching news click if you have any responses if you want to if you have any feedback we'll be welcome it please send it to us thank you once again and keep watching news click