Deal Making, One Man’s Way

For a 10-month-old government fast losing sheen even among its bedazzled bhakts, the manner in which the Rs 50,000-crore Rafale deal was sealed, signed and delivered gave a fleeting glimpse of Prime Minister Narendra Modi’s much-vaunted working style: impatient, secretive, centralised and nearly oblivious of potential blowbacks. The buzz in Delhi is that only two ministers of the 65-member Modi sarkar knew that the deal, hanging fire for a decade, would end up like this, although Dassault and its Indian partner, Mukesh Ambani’s Reliance, had made several representations to Modi since he became PM. The French defence minister had himself made three trips to Delhi between December and March, after Arun Jaitley had relinquished office. “Two weeks before he emplaned for Paris, the PMO called for the files from the defence ministry with a terse ‘We’ll handle this’ kind of message,” says a top source familiar with events.

The IAF, of course, was pushing for Rafale all along. But it took National Security Advisor (NSA) Ajit Doval’s proximity to the Modi to cut through the red tape. Cancelling the entire deal was a no-go because it would have resulted in further delays. There is no confirmation, but two strategic advisors, including possibly former DRDO chief V.K. Saraswat, played a big part.

Opinion is divided on whether defence minister Manohar Parrikar, who took over from Jaitley five months ago, was in on the deal himself. Some aver he played a key role (see Jump Cut); some say he wasn’t in the loop. He certainly wasn’t present at the high table in Paris, populated by MEA officials. All discussions in the last couple of weeks excluded top defence personnel and defence ministry officials. There is no doubt that HAL chief T. Suvarna Raju had no idea. He only came to know of the deal through newspaper reports (see box). “The Rafale deal is typical of Modi’s style of functioning: inventive, sudden, non-transparent,” says former diplomat K.C. Singh.

Even on the French side, only the chief of Dassault and Prime Minister Manuel Valls were reportedly in the know. By doubling the original order for 18 planes in flyaway state, Modi kept the French happy, even if it meant that some of the planes that Dassault was building for the French and Egyptian air forces would have to be diverted to India to fulfil the order. For other European countries snapping at his heels following the church attacks and the conversion debate under his watch, it was a signal to temper their responses.

And by putting the fate of the remaining 126 planes, which were to have been built by HAL, on the backburner, he killed Subramanian Swamy’s conspiracy theories of a Sonia Gandhi-Carla Bruni link in the original UPA deal in one stroke.

Modi was acutely aware that taking HAL out of the Rafale equation would deal a telling blow to his ‘Make in India’ theme. Making a plane, in fact making tens of them, would have breathed new life into the Bangalore-based PSU. But he also realised that getting the French on his side and on their terms was a no-brainer with the long term in mind. It would certainly send a signal to other countries that he meant business.

By Ushinor Majumdar in Delhi