In a landmark development for the Indian private defence sector, Anil Ambani-led Reliance Group and Rafale-maker Dassault Aviation on Monday announced a joint venture (JV) to execute the largest defence offset contract worth up to Rs30,000 crore.
Dassault Aviation has recently won the contract for 36 Rafale fighter jets from the Government of India for Rs60,000 crore with 50 per cent offset clause. This is the largest offset contract to be executed by any defence company in India till date.
The development has come as a boost to the Reliance Group, which entered the defence sector business only in January 2015.
The agreement includes a 50 per cent offset obligation, the largest-ever offset contract in the history of India. The main point of the offset agreement is that 74 per cent of it has to be imported from India, which means direct business worth around Rs22,000 crore. The offset, spread over seven years, will be finalised soon.
Other companies involved in the Rafale deal include French firms MBDA and Thales, besides Safran, which too will be part of the overall offset obligation.
“This new joint venture called Dassault Reliance Aerospace will support Prime Minister Modi’s “Make in India” and “Skill India” policies and develop major Indian programmes with high levels of technology transfer to benefit the entire aerospace sector,” said a joint statement from the companies.
The proposed strategic partnership between Dassault and Reliance will also focus on promoting Research and development projects under the IDDM programme (Indigenously Designed, Developed and Manufactured), a new initiative of Defence Minister Manohar Parrikar.
“The formation of this Joint venture with Reliance Aerospace led by Anil Ambani’s Reliance Group illustrates our strong commitment to establish ourselves in India and develop strategic industrial partnerships under the “Make in India” policy promoted by the Indian Government,” declared Eric Trappier, Dassault Aviation Chairman & CEO.
“We are delighted to partner a world leader in aviation like Dassault Aviation, and a visionary leader like Eric Trappier. This is a transformational moment for the Indian Aerospace sector and for Reliance Infrastructure’s subsidiary Reliance Aerospace”, said Anil Ambani, Chairman of the Reliance Group.