Author: Ajit K Dubey
Publication: ANI News
Date: February 11, 2019
URL:      https://www.aninews.in/news/national/politics/rafale-deal-modi-govt-followed-upas-policy-on-inter-governmental-agreements20190211112139/

At a time when the Narendra Modi government is under attack over the Rafale deal, it is emerging that the policy for signing inter-governmental agreements without "classically" following the Standard Operating Procedure or Standard Contract Document was laid down by the previous Congress-led UPA government in 2013.

The Indian negotiating team, which firmed up the deal for procurement of 36 Rafale fighter aircraft from French company Dassault through an inter-governmental agreement, followed that policy of the UPA government, top official sources said here on Monday.
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Inter Government Agreement

71. There may be occasions when procurements would have to be done from friendly foreign countries which may be necessitated due to geo-strategic advantages that are likely to accrue to our country. Such procurements would not classically follow the Standard Procurement Procedure and the Standard Contract Document but would be based on mutually agreed provisions by the Governments of both the countries. Such procurements will be done based on an Inter-Governmental Agreement after clearance from CFA. The following cases would fall under the preview of this provision:-

(a) There are occasions when equipment of proven technology and capabilities belonging to a friendly foreign country is identified by our Armed Forces while participating in joint international exercises. Such equipment can be procured from that country which may provide the same, ex their stocks or by using Standard Contracting Procedure as existing in that country. In case of multiple choices, a delegation may be deputed to select the one, which best meets the operational requirements.

(b) There may be cases where a very large value weapon system / platform, which was in service in a friendly foreign country, is available for transfer or sale. Such procurements would normally be at a much lesser cost than the cost of the original platform/ weapon system mainly due to its present condition. In such cases, a composite delegation would be deputed to ascertain its acceptability in its present condition. The cost of its acquisition and its repairs / modifications would be negotiated based on Inter-Governmental Agreement.

(c) In certain cases, there may be a requirement of procuring a specific state of the art equipment/platform, however, the Government of the OEM's country might have imposed restriction on its sale and thus the equipment cannot be evaluated on 'No Cost No Commitment' basis. Such equipment may be obtained on lease for a specific period by signing an Inter-Governmental Agreement before a decision is taken for its purchase.

72. In cases of large value acquisition, especially that requiring product support over a long period of time, it may be advisable to enter into a separate Inter Government Agreement (if not already covered under an umbrella agreement covering all cases) with the Govt of the country from which the equipment is proposed to be procured after the requisite inter-ministerial consultation. Such an Inter-Governmental Agreement is expected to safeguard the interests of the Govt of India and should also provide for assistance of the foreign Govt in case the contract(s) runs into an unforeseen problem.
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In 2013, the UPA government came up with a new policy which allows the Defence Ministry to not follow the laid down rules and sign inter-governmental agreements with friendly foreign countries as per mutually agreed provisions between both sides.

"There may be occasions when procurements would have to be done from friendly foreign countries which may be necessitated due to geo-strategic advantages that are likely to accrue to our country. Such procurements would not classically follow the Standard Procurement Procedure and the Standard Contract Document but would be based on mutually agreed provisions by the Governments of both the countries. Such procurements will be done based on an Inter-Governmental Agreement after clearance from CFA (Competent Financial Authority)," the para 71 of the Defence Procurement Procedure, 2013 clarifies.

The sources said the Indian Negotiation Team in the Rafale deal had relied on these provisions of the DPP-2013 while finalising the contract for the combat aircraft.

The DPP-2013 came into force in 2013 when the UPA government was in power and AK Antony was the Defence Minister.