Parallel to the negotiations over the controversial €7.87-billion Rafale deal between India and France, the Defence Ministry raised strong objections to ‘parallel’ talks conducted by the Prime Minister’s Office (PMO).
This “weakened the negotiating position of Minister of Defence and Indian Negotiating Team”, a Defence Ministry note of November 24, 2015, according to the expose by ‘The Hindu’ daily. The matter was brought to the attention of the then Defence Minister Manohar Parrikar.
“We may advise PMO that any Officers who are not part of Indian Negotiating Team may refrain from having parallel parlays [parleys] with the officers of French Government,” it said and suggested that “in case the PMO is not confident about the outcome of negotiations being carried out by the MoD, a revised modality of negotiations to be led by PMO at appropriate level may be adopted in the case.”
The government submitted to the Supreme Court in October 2018 that the negotiations over the Rafale deal were conducted by a seven-member team headed by the Deputy Chief of Air Staff. There was no mention of any role for the PMO in these negotiations.
Official documents brought out by The Hindu revealed that the Defence Ministry protested that the position taken by the PMO was “contradictory to the stand taken by MoD and the negotiating team.” The then Defence Secretary, G Mohan Kumar, made this official notation in his own hand: “RM may pl. see. It is desirable that such discussions be avoided by the PMO as it undermines our negotiating position seriously.”
The Defence Secretary’s firm opposition was recorded on November 24, 2015 on a note prepared by S. K. Sharma, Deputy Secretary (Air-II), and endorsed by the Joint Secretary & Acquisition Manager (Air) and the Director General (Acquisition) in the Ministry.
The new Rafale deal, which bore little resemblance to the original deal under prolonged negotiation, was announced in Paris by Prime Minister Narendra Modi in April 2015. Modi’s decision, announced out of the blue to buy 36 Rafale fighter jets from France instead of the 126 asked for by the Indian Air Force for seven squadrons pushed the price of each fully fitted, combat-ready aircraft up by 41.42 per cent.
The Defence Ministry notes the details of the parallel negotiations conducted by the PMO came to the Ministry’s notice only from a letter of October 23, 2015, from General Stephen Reb, the head of the French negotiating team. The letter “made mention of a telephonic conversation between Jawed Ashraf, Joint Secretary in the Prime Minister’s Office, and Luis Vassy, Diplomatic Adviser to the French Minister of Defence, which took place on 20.10.2015.”
In a letter to Air Marshal Sinha on November 11, 2015, Ashraf confirmed he had held discussion with Vassy, who “spoke to him on the advice of the French President’s office and the issues referred to General Reb’s letter were discussed.”
France President Francois Hollande had told a news agency that “the name of Reliance Group had appeared as part of a ‘new formula’ in negotiations over the Rafale deal, decided by the Modi government after it came to power.” The reference was to the Anil Ambani-owned Reliance Defence.
The Defence Ministry note said the discussions would “tantamount to parallel negotiations while the Indian Negotiating Team constituted by the Ministry of Defence is undertaking the process of formal negotiations with the French side.”
“Such parallel negotiations may be detrimental to our interests as the French side may take advantage of same by interpreting such discussions to their benefit and weakening the position taken by Indian Negotiating Team. This has precisely happened in this case,” the note added.
This was “contrary to the position taken by the MoD and conveyed by Indian Negotiating Team that the commercial offer should be preferably backed by Sovereign/Government Guarantee or otherwise by Bank Guarantee.” The contrary stand taken was also obvious in the parallel negotiations on the arbitration arrangement, the newspaper reported.