Dassault-Reliance joint venture to build, supply combat aircraft on worldwide basis

23 December 2016

A Dassault Aviation-Reliance Group joint venture, formed to execute significant offsets for the Rs. 58,000 crore Rafale fighter jet deal, plans to manufacture and supply military combat aircraft on a "worldwide basis".

Reliance Aero, which was incorporated in April 2015 by the Anil Ambani-controlled Reliance Group, will hold 51 per cent of the share in the joint venture with Dassault holding the rest, according to a clearance application filed before Competition Commission of India (CCI).

The joint venture was announced in October

The Rafale fighter jet deal entails an offsets component ­ money that has to be invested by the company into the Indian defence and aerospace sector ­ of over Rs 25,000 crore. While a part of the offsets will go towards technology acquisition by the Defence Research and Development Organisation (DRDO), a major chunk will go into setting up of manufacturing facilities in India.

According to the CCI application, the market that the JV wants to address is “manufacture and supply of military combat aircraft on a worldwide basis“, indicating that a major part of the operation will be exports.

While India has currently ordered only 36 jets, Rafale has a worldwide market with orders from nations like Egypt and Qatar, besides potential sales in several other countries. The joint venture, venture, which is likely to be operationalised by mid next year, will have its main manufacturing unit in Nagpur. The plan is to set up a 100 acre facility that will integrate a supply chain for the Rafale fighter jet in India.

The Nagpur facility is projected to create at least 1,500 direct jobs over the next seven years.The offsets would also need a large supplier base of more than 300 vendors to supply components and parts.