Much before he became Prime Minister, during his years as an Indian Airlines pilot, Rajiv Gandhi may have been a middleman for the Swedish company Saab-Scania, when it was trying to sell its Viggen fighter aircraft to India in the 1970s.
The astonishing revelation that he was the “main Indian negotiator” for a massive aircraft deal for which his “family” connections were seen as valuable, is contained in the Kissinger Cables, the latest tranche of U.S diplomatic cables obtained by WikiLeaks and accessed by The Hindu as part of an investigative collaboration. The cables will be released on Monday.
The British SEPECAT Jaguar eventually won the race, from which Saab was forced to withdraw by the U.S.
Rajiv Gandhi, who kept away from politics until he was pushed into it by his mother Indira after the death of his brother Sanjay in 1980, came into public life with a squeaky clean image. Years later, a controversy over bribes paid in another military deal with a different Swedish company, Bofors, was to lead to Rajiv’s and the Congress’s defeat in the 1989 elections.
A series of 41 cables between 1974 and 1976 give glimpses into the “fighter sweepstakes” in India, with one wryly observing that the Swedish company had “understood the importance of family influences in the final decision in the fighter sweepstakes.”
Dassault, the French aircraft maker, too had figured this out. According to the cable, their negotiator for the Mirage fighter aircraft was the son-in-law of Air Marshal O.P. Mehra, then Air Chief.
An October 21, 1975 cable from the New Delhi U.S. Embassy (1975NEWDE14031_b, confidential) details information given to it by a diplomat in the Swedish Embassy. “Mrs Gandhi’s oler [sic] son’s only association with the aircraft industry (to our knowledge) has been as a pilot for Indian Airlines and this is the first time we have heard his name as entrepreneur.”
Having noted what the Swedes had said, the cable makes the comment that there was no additional information to either refute or confirm the information.
The cable goes on to say, “Mrs Gandhi (according to the Swedish info) has made the personal decision not to purchase the British Jaguar because of her prejudices against the British. The decision would be between the Mirage [Dassault Mirage F1] and the Viggen.”
Importance of ‘family’In another cable (1976NEWDE01909_b, confidential), the Swedes also made it clear they “understood the importance of family influences” in the final decision. The cable adds: “Our colleague describes Ranjiv Gandhi [sic] in flattering terms, and contends his technical expertise is of a high level. This may or may not be. Offhand, we would have thought a transport pilot [is] not the best expert to rely upon in evaluating a fighter plane, but then we are speaking of a transport pilot who has another and perhaps more relevant qualification.”
The first cable adds that Air Marshal Mehra’s son-in-law was the chief negotiator for the competing Mirage, but it does not give his name.
Contacted in New Delhi, Navin Behl, the former Air Chief’s son-in-law, denied that he was ever involved in any such negotiations. “I was never an arms dealer. We’ve got nothing to do with it. I am a chartered accountant, [I was] practising then [in the 1970s], and now we're in the manufacture and export of home furnishings,” he told The Hindu.
The Swedish diplomat quoted in this cable said his country’s neutral position in world politics was offsetting the Viggen’s higher cost. The cable also records the official’s “irritation at the way Mrs Gandhi is personally dominating negotiations, without [the] involvement of Indian Air Force officers. According to him, negotiations with the Swedes are for 50 Viggen aircraft to be delivered at $4-5 million per aircraft with the Swedes believing that the Indians have made the decision not to purchase any more Soviet military aircraft.”
U.S. blocks dealBut Sweden had to do an abrupt about turn with what appears to be a bit of arm-twisting. An August 6, 1976 cable (1976STOCKH04230_b, secret) titled “Saab-Scania requests for U.S. permission to export Viggen and license to India” appears to confirm this with a blunt message: “The USG, after careful consideration, has concluded that no version of the Viggen containing any classified U.S. components would be acceptable for transfer to India. It would also oppose any transfer to India, for local production, of the advanced U.S. technology represented in the Viggen’s aerodynamic design, engine and flying controls, navigation system, electronic components and weapons systems.”
Another 1976 cable (1976STOCKH04231_b, secret) details the negative USG response to Saab-Scania president Curt Mileikowsky’s informal request for export of Viggen aircraft to India and licence to manufacture such aircraft to India. Senior Swedish officials have also emphasised “that [the] most important consideration to their government was preservation of cooperation with the U.S. on military R&D, which they recognised as vital to maintenance of a viable Swedish defence effort and that the sale of the Viggen to India was of secondary consideration to them in comparison with the value of military cooperation with the U.S.”
Scramble for contractThe earliest reference to the IAF upgrade plan is in a 1974 cable (1974LONDON00554_b, secret), which elaborates how the Indians had nearly completed negotiations for two Navy Corvettes and an unspecified number of Jaguar aircraft, though negotiations temporarily stalled because of the oil crisis.
India, according to the FCO South Asian Department head, had “expressed desire for [a] modest alternative to the Soviets as an arms supply source, and had begun discussions with the British early last summer.” The British were smelling a deal “in the neighbourhood of 30-35 million pounds, probably only the first tranche of an ongoing program which could reach 100-120 million pounds over a period of time.”
The Viggen pitch to India was of immense interest to the U.S. As one cable (1975STATE270066_b, secret) said, the aircraft “contains a large number of parts and components of U.S. origin which are therefore subject to USG control in third-party sales.”
Jaguar, meanwhile, was aggressively in the hunt. A November 19, 1975 cable (1975NEWDE15350_b, confidential), said: “London has now decided to offer the Government Of India a more favorable financing arrangement, 71/4 percent over five years, than was earlier the case. The GOI has asked for two percent over 15 years, but the British tell us this is impossible. The GOI still wants 40 aircraft to be delivered within 36 months. The original British offer was 60 months, but they are now talking in terms of 40 odd months.” The cable ends by saying that the final decision was expected to be political and made by the Prime Minister.
Another cable (1975PARIS33184_b confidential) details French concern that “Mrs Gandhi’s advance toward dictatorship is now irreversible, and that French Prime Minister Chirac was unhappy with the idea of appearing to condone this development through his official visit” but also nursed the hope that the visit would be able to improve sales prospects for the Mirage F-1.
By the next year, the French Embassy is convinced (1976NEWDE00845_b, confidential) that it is Prime Minister [Indira] Gandhi alone who will make the final decision, and it will be on political grounds. The Swedes are also pushing their product. The French believed that the Swedes had dropped their price and offered to take rupees in payment. They were seen as moving towards delivering the first 24 to 36 aircraft to India, with the next aircraft being assembled in India under licence.
Courtesy:
Murali N. Krishnaswamy
CHENNAI, April 8, 2013
http://www.thehindu.com/news/national/rajiv-gandhi-was-entrepreneur-for-swedish-jet-us-cable-says/article4592091.ece
