Indian SC gives Modi clean chit in Rafale deal

Court says no evidence of wrongdoing or commercial favouritism

Reuters December 14, 2018
India's Prime Minister Narendra Modi attends the Vijaya Dashmi, or Dussehra, festival celebrations in the old quarter of Delhi, India, October 19, 2018. PHOTO: REUTERS

NEW DELHI: India's Supreme Court rejected petitions on Friday seeking an investigation into a fighter jet deal worth an estimated $8.7 billion with France's Dassault Aviation, saying there was no evidence of wrongdoing.

Prime Minister Narendra Modi's deal for the purchase of 36 Rafale planes has become a major political controversy because of the escalating price and a decision to pick billionaire Anil Ambani's Reliance Defence as a domestic partner.

However, the court headed by Indian Chief Justice Ranjan Gogoi dismissed the petitions calling for the establishment of a special investigation team to probe the deal. "We don't find any material to show it is commercial favouritism," Gogoi said.

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There has been a major political outcry over the jet deal as Indian opposition parties have alleged corruption and demanded the resignation of Modi.

The deal has been caught in controversy since September when Francois Hollande, who was the French president at the time of the deal, told news website Mediaport that Indian government had pressured Dassault to partner with India's Reliance Defence to meet its "offset policy", BBC reported.

The "offset policy" entails that foreign firms are required to invest at least 30% of a deal's worth back in India. It was introduced in India's Defence Procurement Procedure in 2008 to boost domestic manufacturing.

The Rafale deal, which was signed in 2016, obliged Dassault to invest 50% of the estimated $8.7bn (£6.6bn) contract in India to manufacture some components of the jet with Reliance Defence.

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Ambani has denied the involvement of the Indian government and said that the joint venture was agreed directly between his firm and Dassault.

However the leader of Congress party, India's main opposition, Rahul Gandhi has accused Modi of favouritism of an Indian company in the French deal.

Modi's Bharatiya Janata Party (BJP) denied the allegation, saying the government signed the deal to meet the Indian Air Force's combat requirements and had no role in choosing the French manufacturer's local partner.

Dassault has also supported the Indian government's claim.

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