Joint Venture With Reliance Meets Only 10 Per Cent Of Offset Obligation, Talks On With 100 Other Firms In India: Dassault CEO

Dassault Aviation's investment in a joint venture with Reliance makes just 10 per cent of the total offset obligation under the Rafale jet deal, Dassault Chief Executive Officer (CEP) Eric Trappier has told Agence France-Presse.

In an interview with the agency, he clarified that Reliance is just one of the many firms that Dassault will partner with in order to execute its offset obligations in India, which it agreed to as part of the Rafale deal. He also noted that his company is in negotiations with around a hundred Indian firms and partnerships agreements have already been concluded with about thirty of them.

Explaining that offset execution was obligatory under the Rafale deal and not a tie-up with Anil Ambani’s Reliance, he said that the company uses the term “obligation contractuelle d’offset” or “obligation contractuelle” to refer to offsets.

“To clarify matters, what is called “offset” in English is usually translated into French as “compensation” or “contrepartie”. The reference is the contract we signed and which is called “Offset contract”. With regard to the staff and trades unions organizations, Dassault Aviation uses the term “obligation contractuelle d’offset” or “obligation contractuelle de compensation ”. de compensation ” to refer to offsets,” Trappier was quoted by Agence France-Presse as saying.

This explanation from Dassault comes after French portal Mediapart reported late on 10 October that Deputy Chief Executive Officer of Dassault Aviation Loïk Segalen had said in May 2017 that the firm’s joint venture with Anil Ambani’s Reliance was a “condition”, “imperative and obligatory”. However, it has now emerged that the official may have misquoted the official.

“Signing an offset contract is a requirement of Indian law (Defence Procurement Procedure). The implementation of offsets is an obligation and, under the Indian regulation, the choice of the partners belongs to us,” he said.

When asked why Dassault chose Reliance over HAL as an Indian partner for a joint venture, Trappier said that the arrangement would allow his company to have technical and industrial control over the operations and it will be free to apply its standards. Through the joint venture with Reliance, he noted, Dassault is looking at establishing a long presence in the Indian defence market.

“This JV will produce parts for the Falcon 2000 and Rafale. The choice of the Nagpur site, in central India, was dictated by the availability of land with direct access to an airport runway,” the Dassault CEO added.

Talking about the controversy stirred by the Congress and other opposition parties in India over the Rafale deal, he said it was unfortunate. However, he noted that things are moving rapidly despite the political slugfest.

“The cooperation between Dassault and India, which has existed for 65 years, has been given fresh impetus by Make in India and we are proud to be able to contribute to it,” he noted, providing details about the development of infrastructure in Nagpur for the Dassault-Reliance Aerospace joint-venture.