The Truth Behind Reliance and the Rafale Contract: Debunking the Misconceptions

The ongoing debate surrounding the Rafale contract between Reliance and Anil Ambani has brought significant misinformation into the public eye. It's crucial to clear the air and understand the actual circumstances and the roles of each party involved.

Reliance vs. Rafale Contract Debunked

There is a misconception that Reliance 'gave' the Rafale contract to Anil Ambani. This notion is completely erroneous. The confusion arises from the fact that Reliance ADAG group (which is led by Mukesh Ambani) heavily invested in Narendra Modi during the last two general elections. Consequently, it is often claimed that the Modi government has 'paid back' the investment by giving the Rafale contract to Mukesh's brother, Anil.

However, it is essential to understand the true nature of the Rafale contract. French defense giant Dassault Aviation selected Reliance as one of its offset partners for the delivery of 36 Rafale aircraft to the Indian Air Force. Reliance's role here is that of an offset supplier, contributing to the Indian aerospace industry in a collaborative effort with Dassault.
Moreover, Reliance's 3% share in the entire offset manufacturing operation is noteworthy, underscoring its limited participation rather than a comprehensive contract transfer.

The Legal and Strategic Background

The issue extends beyond the simple transaction of the Rafale contract. To understand the complexities, it is necessary to look into the background of the Reliance ADAG group. The group was incorporated under Anil Ambani in 2014, and in 2016, it entered into a joint venture with Dassault Aviation. This partnership was strategic and aimed at leveraging their respective strengths in the defense and aerospace sectors.

It's important to note that Reliance headed by Mukesh Ambani is not primarily in the defense or aerospace industry. Nonetheless, Mukesh Ambani had dreams of entering the defense space. Unfortunately, these dreams were put on hold due to legal proceedings regarding the excess pumping of gas from the Krishna Godavari basin. The matter has yet to be resolved, and the government cannot invite a firm that has launched legal arbitration proceedings.

Following these legal issues, Mukesh Ambani handed over the Pipavav Shipyard to the Anil Ambani group in 2015. This shift in control means that all activities in defense and aerospace are now managed by the Anil Ambani group. Consequently, there is no question of Reliance handing over the Rafale contract to Anil Ambani. In fact, it would not make sense for Mukesh Ambani to hand over such a strategic and lucrative contract to his brother.

Conclusion

In conclusion, the Rafale contract is not a result of any favoritism or political returns. It is a collaborative effort involving Dassault Aviation and Reliance as an offset supplier. Reliance's role is specialized, and Anil Ambani's group has the operational control in the defense sector due to the strategic shift in 2015.

It is time to put an end to the misconceptions and engage in a more informed discussion. The Rafale contract needs to be understood in its broader context of international defense collaboration, legal standings, and strategic business decisions.