CAG said in its report, Dasau did not fulfill the condition of Rafale agreement, MBDA also did not submit technology to India

The CAG has put its report in Parliament on the war plane Rafale.

24th September, 2020


The Comptroller and Auditor General (CAG) on the war plane Rafale has submitted its report in Parliament. It said on the purchase of 36 Rafale that French war aircraft manufacturer Dassau Aviation and European missile manufacturer MBDA have not yet handed over the technology given to India under the agreement. Dassau Aviation has manufactured Rafate jets while MBDA is the company supplying aircraft missiles.

Technology not handed over to Indian industry

The report presented in Parliament on Wednesday also questioned the ability of India's offset policy. The CAG says that it has not yet seen a single case in which the foreign company has transferred high-level technology to the Indian industry. It also said that in terms of foreign direct investment (FDI), defense sector ranks 62nd out of total 63 sectors.

There was talk of giving 30 percent high technology to DRDO

The CAG has stated in its report that Dassau Aviation and MBDA had proposed to give 30 per cent high technology to DRDO under the defense deal. According to the CAG, the DRDO seeks technical assistance in the construction of the light war aircraft LCA engine Kaveri. So far, the company has not confirmed the transfer of the technology.

Inter-governmental deal was signed with France

The French company has supplied the first batch of five Rafale aircraft. On July 29, the missile-equipped aircraft reached India. About four years ago, the Indian government signed an inter-governmental deal with France. Under this, 36 Rafale war planes are to be delivered to India for Rs 59,000 crore. Under India's offset policy, foreign defense companies are required to spend thirty percent of the total cost of the agreement with India in India.

Technology transfer condition

Through this expenditure, India acquires parts of the product or research and development units are established. Under the offset standards, capital purchases of over Rs 300 crore are made through imports. The offset constraints can also be met through FDI. This includes transfer of technology to Indian companies and purchase of products made by Indian companies.

Failed to meet the obligations

The CAG said that from the year 2005 to March 2018, there were a total of 48 offset agreements with foreign companies worth Rs 66,427 crore. By December 2018, the company had to compensate for the offset agreement of Rs 19,223 crore. However, so far only 11,396 crore work has been done, which is 59 percent of the total agreement. Under the agreement, the remaining aircraft worth Rs 55,000 crore are to be delivered by 2024. The auditor states that the producer companies have failed to meet these obligations under the offset agreement. Since most of the time of the contract has expired, the producer company only benefits in this delay.

Upgrade program delay

The CAG has criticized the Defense Ministry over the delay in upgrading the Mi-17 helicopters. Due to the continuous delay in the supply deadline, there is only two years left to upgrade these helicopters. The proposal to upgrade these helicopters was proposed in the year 2002. But even after 18 years, they have not been upgraded. That is why the ability to fly these helicopters is very limited.

Category: India

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Reported by:
Pankaj Prasad