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French aerospace major Dassault Aviation and European missile maker Matra BAE Dynamics Alenia (MBDA) are yet to fulfil their offset obligations of offering high technology to India under the Rafale aircraft deal, the Comptroller and Auditor General said in a report released on Wednesday.
The Dassault Aviation is the manufacturer of the Rafale jets while the MBDA supplied the missile systems for the aircraft.
India had signed an inter-governmental agreement with France in September 2016 to procure 36 Rafale jets at a cost of Rs 59,000 crore, and the offset obligations were part of the contract.
In its report tabled in Parliament, the national auditor said the Dassault Aviation and the MBDA proposed in September 2015 to discharge 30 per cent of their offset obligations by offering high technology to the Defence Research and Development Organisation (DRDO), but the two firms are yet to do it.
Under India’s offset policy, foreign defence entities are mandated to spend at least 30 per cent of the total contract value in India through procurement of components or setting up of research and development facilities.
The DRDO was looking for French technology for indigenous development of an engine for the Light Combat Aircraft Tejas.
The CAG also painted a grim picture of efficacy of India’s offset policy saying it did not find a single case of foreign vendors transferring high technology to the Indian industry, adding defence sector ranked 62nd out of 63 sectors receiving FDI.
“In the offset contract relating to 36 Medium Multi Role Combat Aircraft (MMRCA), the vendors M/s Dassault Aviation and M/s MBDA initially proposed to discharge 30 per cent of their offset obligation by offering high technology to DRDO,” the CAG said.
The first batch of five Rafale jets arrived in India on July 29.
