- France said they're not involved in choice of Indian industrial partners
- Ex-France president said India proposed Anil Ambani firm for Rafale deal
- Defence ministry said the French media report "is being verified"
Here's your 10-point cheat-sheet to this big story:
Dassault Aviation in a statement said, "This offsets contract is delivered in compliance with the Defence Procurement Procedure (DPP) 2016 regulations. In this framework, and in accordance with the policy of Make in India, Dassault Aviation has decided to make a partnership with India's Reliance Group. This is Dassault Aviation's choice..."
The French government's statement said French companies have complete freedom to choose Indian partner companies in the Rafale deal. "In accordance with India's acquisition procedure, French companies have the full freedom to choose the Indian partner companies that they consider to be the most relevant, then present for the Indian government's approval the offsets projects that they wish to execute in India with these local partners so as to fulfil their obligations in this regard," it said.
Earlier on Friday, French journal Mediapart had quoted Francois Hollande as saying: "We did not have a say in this... the Indian government proposed this service group and Dassault negotiated with (Anil) Ambani group. We did not have a choice, we took the partner who was given to us."
Denying the charge, a defence ministry spokesperson tweeted that the report "is being verified" and that "neither GoI (government of India) nor the French Government had any say in the commercial decision."
The report has intensified a massive government-opposition row in the build-up to elections including the 2019 national polls. The opposition alleges crony capitalism in the nomination of Reliance Defence, since the group has no prior experience in aerospace manufacturing.
The Anil Ambani-led group is manufacturing aerospace components as part of the offset component of the Rafale deal. The clause requires Rafale manufacturer Dassault to ensure that business worth around Rs. 30,000 crores is generated for the Indian defence system. Reliance Defence is not making components for the Rafales ordered by India but is building assemblies for Dassault business jets.
Congress president Rahul Gandhi, who has been attacking the PM over the Rafale deal, tweeted to say "the PM has betrayed India and has dishonoured the blood of our soldiers".
Anil Ambani, in a two-page letter in December to Rahul Gandhi had defended his company's credentials: "Not only do we have the necessary experience but we are also the leaders in several important areas of defense manufacture."
Other French companies also need to fulfil their offset obligations in the deal. These companies are Safran, which manufactures the engines of the Rafale, MBDA, which is providing many of the weapon systems and Thales, which manufactures the avionics of the fighter.
Francois Hollande is also facing allegations of crony capitalism in his country. The Indian Express has reported that two days before he came to New Delhi as the Republic Day chief guest and signed a Memorandum of Understanding with Prime Minister Narendra Modi for delivering 36 Rafale aircraft, Anil Ambani's Reliance Entertainment entered into a deal to produce a film with Hollande's partner and actor Julie Gayet.