Hollande, who spoke to the French media house Mediapart, said, "It's the Indian government which proposed this service group [meaning Reliance], and Dassault which negotiated with Ambani".
On Friday evening, the official Twitter account for India's defence ministry said the report of Hollande's comments were "being verified", but that the Indian and French governments did not have a role in Dassault's decision. The deal was signed in 2016. "PM personally negotiated and changed the Rafale deal behind closed doors". It brings under strain the Narendra Modi government's attempts to distance itself from the selection of a company belonging to Anil Ambani's Reliance group as an offset partner by Dassault, maker of the fighter planes.
The move prompted an outcry from Opposition, which has asked why a private firm, rather than the state-owned Hindustan Aeronautics Limited, was given the opportunity to manufacture the jets. "Thanks to François Hollande, we now know he personally delivered a deal worth billions of dollars to a bankrupt Anil Ambani", Rahul Gandhi tweeted.
"No matter what the indian government says that perception is that the Indian government gave the offset contract to Anil Ambani, a guy who has no history of producing defense equipment", says Nilanjan Mukhopadhyay, a New Delhi based political analyst.
Ten days after India sealed the government-to-government agreement on the Rafale deal, Reliance Defence and Dassault had announced a joint venture (JV) in the aerospace sector and a year later, the foundation stone of a manufacturing facility was laid in Mihan, Nagpur.
Rahul Gandhi on Saturday accused PM Modi of being "corrupt", saying former French president Francois Hollande's remarks on Reliance Defence shows "clear cut" corruption in the Rafale deal. "Shame on you. You betrayed India's soul", Mr Gandhi tweeted this morning. "We did not have a choice, we took the interlocutor who was given to us", said Hollande. Reliance Defence is not making components for the Rafales ordered by India but is building assemblies for Dassault business jets.
However, the Hollande bombshell provided fresh ammunition to the Opposition to bay for blood against the Modi government. Delhi chief minister Arvind Kejriwal on Friday demanded that the BJP-led Central government come clean on the Rafale deal in light of former French president Francois Hollande's purported statement "directly contradicting" its stand. "It provides for a separate contract in which Dassault Aviation commits to make compensation investments (offsets) in India worth 50% of the value of the purchase".
Under the Rafale deal, France must spend amounts totalling around half the eight billion euros ($9.4 bn) paid by the Indian government. In this framework, and in accordance with the policy of Make in India, Dassault Aviation has decided to make a partnership with India's Reliance Group. Senior ministers, including defence minister Nirmala Sitharaman and finance minister Arun Jaitley, have dismissed any suggestion of a government role in the choice of Reliance.