Rafale Deal

Rafale Deal

Rafale deal has been in news for quite sometime and will remain so till the elections of 2019 and maybe even later. It is of course not ‘Modi’s Bofors’.  Rajiv Gandhi had  misused government machinery to obfuscate and confuse the nation by involving even Amitabh Bachchan & Hinduja brothers. I have tried to give a holistic analysis  as simply as I can. 

Characteristics of Personalities Involved

  • Sonia, Congress: Personally corrupt & leading a corrupt party.
  • Antony, Congress, DM: Ineffective and ultra-safe player (one of the worst DMs)
  • Modi: Personally not corrupt, decisive, but leading BJP as the biggest recipient of black money; ruthless operator with no scruples.
  • Parrikar: Personally not corrupt, competent and decisive (one of the best DMs).

Relevant Background

Air Force was badly in need of Rafale or an equivalent fighter aircraft. In the Congress regime Rafale was found to be the most suitable fighter aircraft to be bought. The plan was to procure 126 aircrafts. 18 aircrafts were to delivered in ready condition and 108 aircrafts were to be built jointly between Dassault ( 30%) and HAL (70%). The price at which negotiation was going on was around Rs 526.1 crore per aircraft. The deal never got finalised. It was a government to government deal and no middlemen were involved. The deal was terminated officially by Parrikar on 30Jul 2015.

Deal by Modi Government

A  fresh deal was negotiated in Sep 2016. In this deal 36 aircrafts were to be obtained in ready condition.The price negotiated per aircraft was Rs 1570.8 crore. It was claimed by Modi government that it has got the deal at a lower price than Sonia government.

Initial Impression

My initial impression was that decisive Modi and Parrikar have shown concern for security and considering the paucity of funds have gone ahead with procuring lesser number of aircrafts but quickly. It was a positive and appreciable step.

Major Issues of Debate

  • The price has gone up from Rs 526.1 crore to 1570.8 crore.
  • The explanation for the price rise is hard to believe.
  • The secrecy clause being given as reason for non disclosure of price is unjustified.

Aspects Arousing Suspicion

  • Sitharaman, DM had promised to provide all financial details but then went back on her words.
  • Anil Ambani incorporated a company shortly before the deal and got involved in the deal instead of HAL.
  • If there was no wrong doing then there is no reason for the government to disclose all commercial aspects of the deal in the Parliament.


  • The price comparison between Congress deal and Modi deal is unfair because the Congress deal was never finalised. Giving the benefit of doubt to Modi government and considering the effect of inflation and other issues it can be assessed that a price per aircraft of about Rs 900 crore would be in the acceptability zone. The price per aircraft of  Rs 1570 crore appears unjustifiable.The explanations being offered lack credibility.
  • Sitharaman, the present DM’s ‘U-turn’ on her earlier statement arouses suspicion for which no legitimate answer has been received.
  • When an Ambani or Adani name comes up I have reason for suspicion because these guys owe their wealth less to innovations or creative ideas and more to maintaining relations with power. Relations with authority are maintained only through bribes!
  • Rafale will remain an important election issue for 2019.
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  1. There may be two reasons for the secrecy clause.
    1. Price of engines or cost per weponary makes it easy to adjudge the detterence amd deep strike capability of the assets.
    2. The seller consider it disadvantageous to reveal sweetners or discounts because it will affect their bargaining power vis-a-vis other customers.

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