India's Rafale Offset Programme: A Complex Web of Unfulfilled Liabilities

India's Rafale Offset Programme: A Complex Web of Unfulfilled Liabilities\n\nIndia's Rafale offset programme has been under intense scrutiny in recent times, with the Comptroller and Auditor General (CAG) finding that vendors had not certified proposed technology transfers. The 36-jet deal's 50% ₹30,000 crore offset obligation had a seven-year performance period, with 57% of MBDA's and 58% of Dassault's obligations falling due in the final year.\n\nThe government certified offset liabilities for the Rafale to commence from September 23, 2019, but lacks granular contract-level details on accrued liabilities. The CAG's 2020 audit concluded that the French vendors had not certified the proposed transfers of high technology to India's Defence Research and Development Organisation (DRDO).\n\nWith over half of the offset obligation due in the final year of the seven-year performance period, the closure of the Rafale deal in 2023 became critically important. The government has certified to the CAG that offset liabilities for the Rafale would commence from September 23, 2019.\n\nAccordingly, the first annual commitment was due in September 2020. Consequently, the year 2023 emerged as the critical period for finalising commitments.\n\nHowever, the public record does not show a granular contract-level view of the liabilities actually accrued for each of the major offset contractors for the Rafale.\n\nThe importance of questioning this lacuna is amplified by the fact that India's larger defence-offset programme has proven to be a major liability. As the Public Accounts Committee (PAC) reported in its 50th report, there were 56 offset contracts with an aggregate value of $13.215 billion that had been signed, with 26 ongoing contracts accounting for about $9.91 billion in obligations.\n\nThe unfulfilled value of these contracts stood at ₹42,500 crore or 45%, and the PAC recommended that 'action be taken forthwith for clearance of outstanding liabilities as on 31st December 2025' and that a special audit be undertaken to review the actual implementation.\n\nIn an extensive review of the PAC's findings, The Wire noted that while 20 contracts had been completed, with another 10 due for completion by 2023, 26 were ongoing till 2033. Furthermore, as many as 20 of the 56 contracts were due for submitting their claims to the government by January 2026; while the report stated that 'most claims due to the government by January 2026 have been submitted by the vendors', a significant portion of these were still under audit and verification.\n\nBy virtue of being the largest single platform in India's offset programme, the Rafale would need a contract-level accountability of how much was claimed by Dassault and MBDA, how much was approved by the ministry, how much was disapproved or still under review, and what liabilities if any were incurred by the vendors due to delays, penalties or other contractual adjustments.\n\nIn conclusion, the Rafale offset programme has raised significant concerns over unfulfilled liabilities, and a thorough review of the programme is necessary to ensure transparency and accountability in India's defence offset policy.