New Delhi: Criticising the policy of Defence Ministry of India for offsets, the country’s Comptroller and Auditor General (CAG), which also governs the deal with France for 36 Rafale jets made by Dassault Aviation, has mentioned in a report that the French firm has so far not made good on its offset obligation to the Defence Research and Development Organisation (DRDO).
According to a report published by a Delhi based news organisation NDTV, a certain percentage of the deal value with foreign firms under the offset policy should flow into India as foreign direct investment or FDI, which would eventually include technology transfer, local manufacturing of advanced components and creating jobs.
“In the offset of four contracts relating to 36 Medium Multi-Role Combat Aircraft (MMRCA), the vendors Dassault Aviation and MBDA initially proposed (September 2015) to discharge 30 per cent of their offset obligation by offering high technology to DRDO,” the CAG said in the report tabled in parliament, referring to the Defence Research and Development Organisation.
“DRDO wanted to obtain technical assistance for indigenous development of engine (Kaveri) for the Light Combat Aircraft. Till date the vendor has not confirmed the transfer of this technology,” the CAG said. The policy of offsets has “not yielded the desired result,” the top auditor said.
The report also mentioned: “the (Defence) Ministry needs to review the policy and its implementation. It needs to identify the constraints faced by foreign suppliers as well as the Indian industry in leveraging the offsets, and find solutions to overcome these constraints.”
The French Aircraft manufacturing company, Dassault Aviation has said it will eventually meet its offset obligation, which has slowed down in the last few months due to the coronavirus crisis, the report said.
As the five multi role jets have been inducted into the Indian Air Force, India’s deal with France for 36 Rafale jets is worth ₹ 58,000 crores.
The Defence Research and Development Organisation has been involved in the Light Combat Aircraft (LCA) programme since the project began over three decades ago.
As India’s Kaveri engine developed by the Gas Turbine Research Establishment, a lab under the DRDO in Bengaluru, couldn’t give the kind of performance and thrust that were planned for the LCA. Eventually, the Kaveri engine project was shelved and India chose an engine made by American firm GE.
On the project, France during the Rafale negotiations agreed to help India work on an upgraded Kaveri engine with a better thrust that can potentially replace the American engine.
Earlier, the former president of Indian National Congress had also raised the same issue when his party was conducting rallies of general elections in 2019.
In 2016, the BJP-led government of India signed the ₹58,000 crore deal to buy 36 Rafale jets from France after a nearly seven-year exercise to buy 126 MMRCA for the Indian Air Force failed during the Congress regime.
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