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October 25, 2021
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CAG says Rafale makers didn’t deliver on offsets, yet to make tech transfer


The Comptroller and Auditor General (CAG) in a report tabled in the parliament on Wednesday stated, “…it was found that the foreign vendors made various offset commitments to qualify for the main supply contract but later, were not earnest about fulfilling these commitments.”

It was highly critical of the government’s offset policy for defence procurement and cited the examples of the newly inducted Rafale jets. There is an order of 36 Rafale fighter jets from French manufacturer Dassault Aviation. They have not kept their promise of transfer of technology as there is no delivery of offsets, laments the CAG.

The CAG, in the statement, said that in the offset contract relating to 36 Medium Multi-Role Combat Aircraft, the manufacturers initially proposed (September 2015) to discharge 30 percent of their offset obligation by offering high technology to DRDO (Defence Research and Development Organisation). However, they are yet to deliver on the agreement.

“Thus, the objectives of the offset policy remain largely unachieved, even after more than a decade of its adoption,” CAG mentioned. It further added that “the (Defence) Ministry needs to review the policy and its implementation”.

The CAG revealed that DRDO wanted to procure technical assistance to make the indigenous engine Kaveri for the Light Combat Aircraft. “To date, the Vendor has not confirmed the transfer of this technology.”

In August, Congress leader Rahul Gandhi had tweeted: “Money was stolen from the Indian exchequer in Rafale,” after a report surfaced that the CAG had dropped the audit of the Rafale offset deal.  

“Under these contracts, by December 2018, Rs 19,223 crore worth of offsets should have been discharged by the vendors. However, the offsets claimed to have been discharged by them was only Rs 11,396 crore, which was only 59 percent of the commitment. Further, only 48 percent (Rs 5,457 crore) of these offset claims submitted by the vendors were accepted by the Ministry,” the CAG said.

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