[《The lead partner chosen for the offset contract was the Reliance Group, a
conglomerate run by members of the Ambani family, one of India’s richest
and most ostentatious. While Reliance has long been involved in
manufacturing and has billions of dollars in capital, it has no experience
making jets. And the Ambanis are known to be strong Modi supporters.
The former French president, François Hollande, added to the controversy
surrounding the deal when he said recently that the Modi government had
specifically proposed the Ambani-owned company for the offset contract.
...
Rahul Gandhi, the Congress Party leader, put it even more bluntly. On
Twitter, he called Mr. Modi the “commander in thief.”》]

https://www.nytimes.com/2018/10/06/world/asia/india-narendra-modi-bjp.html

With ‘Fishy’ Jet Deal, India’s Opposition Finally Lands a Blow on Modi

Image
Prime Minister Narendra Modi of India with then-President François Hollande
of France in Paris in 2015. During the visit, Mr. Modi announced a deal to
buy 36 Rafale fighter planes.CreditCreditAlain Jocard/Agence France-Presse
— Getty Images

By Jeffrey Gettleman and Kai Schultz

Oct. 6, 2018

NEW DELHI — Prime Minister Narendra Modi of India swept into office four
years ago vowing to crush corruption. Some of his most momentous acts since
taking office, like wiping out nearly 90 percent of India’s currency
virtually overnight, have been to clean up the country’s endemic graft.

Mr. Modi was also quick to accuse the rival Congress Party, India’s
longstanding political dynasty, of lavish spending and crony capitalism.

But in the past few weeks, the role of accuser has been dramatically
reversed.

The Congress Party, which had seemed anemic since Mr. Modi’s election, has
found a new spring in its step by hounding the prime minister over an
opaque arms deal that has raised some serious questions.

Why did Mr. Modi renegotiate a deal for 36 fighter jets?

Why was a company run by members of one of India’s wealthiest families
chosen to participate in the deal, despite having no experience building
jets?

Why did the costs of the planes seem to jump so much?

And why isn’t Mr. Modi sharing more details?

For several years, Indian politics have been dominated by Mr. Modi’s party,
the Bharatiya Janata Party, or B.J.P., which has grown accustomed to
pushing around its rivals.

But for the first time in a long time, the opposition, by building a
damaging narrative around this arms deal, has landed a solid punch, and is
hoping to keep the pressure on Mr. Modi and his party ahead of next year’s
general election.

Congress Party officials have dominated headlines and social media with
their accusations that Mr. Modi inflated the price of the aircraft,
estimated to cost $8.7 billion, and brought in a trusted ally on the deal
so his political party could get something back in return.

“We smell something fishy,” said Jaiveer Shergill, a Congress Party
spokesman.

The story of the jets starts in 2015, when Mr. Modi, on a visit to Paris,
proudly announced that he had struck a deal with the French to buy three
dozen supersonic Rafale fighter planes. The surprise wasn’t the French
partner, Dassault Aviation, maker of the storied Mirage.

Image
Congress Party activists wearing masks of of Mr. Modi and Defense Minister
Nirmala Sitharaman, next to a model of a Rafale fighter jet at a protest in
Mumbai in July.CreditDivyakant Solanki/EPA, via Shutterstock

What raised eyebrows was a new twist in the deal announced more than a year
later. The arrangement included what is called an offset contract in which
the French, in return for selling India billions of dollars of planes,
would invest in India and help Indian companies build aerospace components.

The lead partner chosen for the offset contract was the Reliance Group, a
conglomerate run by members of the Ambani family, one of India’s richest
and most ostentatious. While Reliance has long been involved in
manufacturing and has billions of dollars in capital, it has no experience
making jets. And the Ambanis are known to be strong Modi supporters.

The former French president, François Hollande, added to the controversy
surrounding the deal when he said recently that the Modi government had
specifically proposed the Ambani-owned company for the offset contract.

“We did not have a say in this,” Mr. Hollande, who was president at the
time the deal was made, has been quoted as saying by Mediapart, a French
news outlet. “We did not have a choice.”

Mukesh Ambani, the billionaire who built a 27-story house that overlooks
slums, is considered one of Mr. Modi’s closest corporate allies.

His younger brother, Anil, runs the Reliance Group, a separate operation
from Mukesh’s holdings. Some of the Reliance Group’s business units are
struggling, and it recently sold a number of assets to lower its debt load.

Anil has also heaped praise on Mr. Modi, calling him “a king among kings”
and likening him to one of the greatest heroes of Hindu mythology.

Though most pundits believe next year’s national elections are still Mr.
Modi’s to lose, the contest appears to be tightening. More and more Indians
are frustrated with the economy, inflation and Mr. Modi’s lofty but
unfulfilled promises to create enough jobs.

Image

Anil Ambani, center, the head of the Reliance Group, with Florence Parly,
the French defense minister, and Éric Trappier, the chairman of Dassault
Aviation, in Nagpur, India, last year.CreditMoney Sharma/Agence
France-Presse — Getty Images
So opposition politicians have seized on this jet deal with an almost
desperate glee.

Reliance will make an “unwarranted, escalated profit,’’ said Mr. Shergill,
the Congress Party spokesman. “How much of a share is the B.J.P. getting
out of that profit?”

Rahul Gandhi, the Congress Party leader, put it even more bluntly. On
Twitter, he called Mr. Modi the “commander in thief.”

With these accusations swirling around him, Mr. Modi has gone with his
usual response: silence.

Rather than speaking out himself, he has deputized party officials and
ministers to fend off claims of a quid pro quo between the governing party
and Reliance Group. His stand-ins have argued that the details of the
agreement, including how the price was set and why Reliance was selected,
cannot be revealed because of the contract’s “secrecy clause.”

Analysts say the strategy isn’t working.

“This is a persistent problem with this government,” said Milan Vaishnav,
the director of the South Asia Program at the Carnegie Endowment for
International Peace. “You have no clear spokesperson with the prime
minister’s office, you have no media adviser. I think on many of these
issues they often come across as flat-footed or disorganized.”

Until the backlash over the jet deal, Mr. Modi had seemed to float above
the most serious allegations against his administration or political party.
A shrewd steward of his image, he would draw on his personal story of being
the son of a tea seller, a devout Hindu and a prime minister who lives
simply.

He has often boasted that his government was clean and that he was a cut
above previous prime ministers tainted by corruption. One was Rajiv Gandhi,
Rahul’s father, who was suspected of taking millions of dollars in
kickbacks in the 1980s from another opaque arms deal, although an Indian
court officially cleared him in 2004, 13 years after his assassination.

Now, Mr. Vaishnav said, the opposition can say about Mr. Modi: “You’re just
like anybody else.”

India’s Ministry of Defense denied any wrongdoing in the deal, calling the
offset contract “a purely commercial arrangement between two private
companies.”

An official with Dassault Aviation said in an email that the company chose
“our partners freely without pressure from the Indian government.”

Image

The Indian Air Force’s Russian-made fighter jets during a Republic Day
parade in New Delhi in January.CreditAdnan Abidi/Reuters
Supporters of Mr. Modi argue that the Reliance Group, a conglomerate with
thousands of employees and experience working on big infrastructure
projects, isn’t such an odd choice as a partner to the deal.

A Reliance spokesperson said that other Indian companies with little track
record in defense manufacturing had also jumped into the sector and that
this controversy was a “nonissue” stirred up by corporate rivalries.

India’s original plan was to buy 126 Rafale jets, with a large portion of
them built in India, for less than $100 million per jet, according to
figures provided by Congress Party officials, whose leaders negotiated the
first rounds of the deal when they were in power several years ago.

At that time, the leading contender on the India side was Hindustan
Aeronautics, a government-owned company with a history of making military
aircraft, though its record on deliveries was mediocre.

Under the terms of the deal negotiated by Mr. Modi, the price-per-plane
rose enormously, Mr. Gandhi contends, to over $230 million each.

That figure has been contested by defenders of the deal, who say its total
price also includes missiles, spare parts and other costs — more than just
the planes themselves, which they say individually cost a little more than
$100 million each.

One point on which there is widespread agreement: India’s need to update
its aging fighter jets. India aspires to be able to wage a two-front war,
but analysts say its current air force would be annihilated by a
simultaneous attack from China and Pakistan, India’s regional rivals.

While voters may find the murky affair hard to follow, the opposition is
likely to do all it can to make sure people don’t forget.

“This is all about optics,” said Harsh V. Pant, an international relations
professor at King’s College in London.

“It’s not about bringing anyone to justice or doing anything for the
greater good,’’ he added. “It’s all about the 2019 election.”

Emma Bubola contributed reporting from Paris, and Hari Kumar from New Delhi.

A version of this article appears in print on Oct. 7, 2018, on Page A9 of
the New York edition with the headline: With ‘Fishy’ Jet Deal, India’s
Opposition Finally Lands a Blow on Modi.



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