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Asia-Pacific

Hollande sparks controversy over French Rafale sale to India

media Former French Prime Minister François Hollande addresses a conference in Montreal, Canada, September 21, 2018. AFP

Ex-President François Hollande said the Indian government imposed Reliance Industries as a trading partner for France's 8 billion-euro sale of Rafale fighter jets in 2016.Indian opposition accused PM Modi of "betrayal". Questions also surround Reliance financing a film by Hollande's partner Julie Gayet.

Former French president Francois Hollande on Friday fuelled controversy over India's multi-billion dollar purchase of 36 Rafale fighter jets in 2016, reportedly saying France was given "no choice" on the Indian partner for manufacturer Dassault.

Did Modi bail out Reliance Group through preferential treatment?

His comments stoked debate on a subject which has gained significant traction in India in recent weeks, since the opposition Congress party accused Prime Minister Narendra Modi of favouring private conglomerate Reliance Group over a public company in the aircraft deal.

India's opposition party alleges Modi gave preferential treatment to industrialist Anil Ambani, the billionaire chairman of Reliance Group, to the detriment of state-run Hindustan Aeronautics Limited (HAL).

A Dassault Rafale aircraft is seen at the ILA Air Show in Berlin, Germany, April 25, 2018. REUTERS/Axel Schmidt

A decision by Dassault, say French and Indian officials

Officials in India and France say aircraft manufacturer Dassault had freely chosen to partner with Reliance, despite Ambani having no previous experience in the field of aeronautics.

"We did not have a say in that," Hollande told investigative website Mediapart. "It was the Indian government that proposed this service group (Reliance), and Dassault who negotiated with Ambani.

"We did not have a choice, we took the interlocutor who was given to us," added Hollande, who was president of France from 2012-2017.

French Ex-President François Hollande's partner Julie Gayet at Mont-Valérien, France, 18 June 2015. REUTERS/Charles Platiau

Questions over Hollande's partner Julie Gayet's film financing

The former French leader denied any conflict of interest with Reliance Group, which partially financed a film by his girlfriend Julie Gayet in 2016.

"That is why, moreover, this group (Reliance) did not have to give me any thanks for anything. I could not even imagine that there was any connection to a film by Julie Gayet."

Contacted by AFP, France's embassy in New Delhi did not comment.

A Rafale fighter jet performs during the Aero India air show at Yelahanka air base in Bengaluru, India, February 18, 2015. REUTERS/Abhishek N. Chinnappa/File Photo

Did Dassault really have a choice?

India's defence ministry wrote on Twitter that neither the Indian nor French government "had any say in the commercial decision".

The French foreign ministry later issued a statement saying that "the sole obligations of the French government were to assure delivery and the quality of the equipment".

Paris was "in no way involved in the choice of Indian industrial partners," the ministry added.

For its part Dassault Aviation said in a statement Friday that the contract was "a government-to-government agreement".

Congress President Rahul Gandhi, who has led the opposition's focus on the deal, wrote: "Thanks to Francois Hollande, we now know he (Modi) personally delivered a deal worth billions of dollars to a bankrupt Anil Ambani."

"The PM has betrayed India. He has dishonoured the blood of our soldiers," Gandhi added.

FILE PHOTO: Supporters of India's main opposition Congress Party shout slogans during a protest demanding from government to disclose the details of Rafale fighter planes deal, in Mumbai, India, July 30, 2018. REUTERS/Francis Mascarenhas/File Photo

World's largest defence importer

Foreign manufacturers obtaining arms contracts in India are obliged to reinvest a portion of the sums collected in India.

Under the Rafale deal, France must spend amounts totalling around half the eight billion euros ($9.4 bn) paid by the Indian government.

Dassault has invested more than 100 million euros in its joint venture with Reliance.

FILE PHOTO: French President Francois Hollande (L) shakes hands with India's Prime Minister Narendra Modi during a photo opportunity ahead of their meeting at Hyderabad House in New Delhi, India, January 25, 2016. REUTERS/Adnan Abidi/File Photo

The French firm had spent years negotiating a deal for 126 fighter jets to be manufactured in India with HAL, but talks had stalled.

On taking office, Modi's government cancelled the negotiations and decided to directly purchase 36 Rafale fighter jets made in France.

India -- the world's largest defence importer -- has been investing tens of billions in updating its Soviet-era military hardware to counter long-standing territorial disputes with its nuclear-armed neighbours, including a strengthening China.

It intends to use compensations payments such as in the Rafale deal to create a local defence industry.

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