Anil Ambani-led Reliance Defence Ltd has signed a strategic pact with UAE's Emirates Defence Industries Company (EDIC) to collaborate in the sector, especially in maintenance, repair and overhaul category.
The two companies have agreed to jointly explore the opportunity for manufacturing and building capabilities in defence vehicles, aviation and associated areas, defence equipment and armament manufacturing, defence electronics, commercial and naval ships besides Maintenance, Repair and Overhaul (MRO) of military equipment and platforms.
"The partnership will explore the opportunity in the UAE defence industry which has many capital expenditures but the costs for setting up facilities, recruiting and developing scientists and engineers are high," Reliance Group said in a statement.
"The partnership will aim at creating synergy to bring down operational costs and leverage each others' capabilities," it added.
Reliance Defence Limited (RDL), established as a wholly-owned subsidiary of Reliance Infrastructure Limited (RIL), has 11 subsidiaries in niche segments of the sector.
In Defence and Aerospace segment, RDL is pursuing partnerships with leading international original equipment manufacturers and equity stake in existing companies within the country as also globally to meet homegrown solutions for the defence sector.
EDIC is the premier integrated national defence services and manufacturing platform from the UAE.
It is in process of finalising the acquisition of Tawazun-owned pistol and rifle maker Caracal, light munitions maker Caracal Light Ammunition, and ammunition systems company Burkan, Mubadala's unmanned systems developer Abu Dhabi Autonomous Systems Investment (ADASI) and AMMROC, the advanced military maintenance, repair and overhaul centre.
This centre is a joint venture between Lockheed Martin, Sikorsky and Mubadala with EDIC taking over Mubadala's share, the statement said.
These five firms are in addition to the 11 companies that EDIC is integrating under the first phase, it added.
Industry sources said commonality in terms of platforms used by Armed forces in India and the UAE -- Mirage 2000, Hawk trainers, Pilatus PC7, Lockheed Martin C130J and C-17 -- present an opportunity for co-operation between the two countries.
They further informed that India spends close to Rs 8,000 crore every year on maintenance of aircraft alone.
"The Maintenance, Repair and Overhaul (MRO) expenditures for aircraft and weapon platform systems by parametric estimations exceed 50 per cent of the initial acquisition cost across the spectrum," the sources said.
AMMROC provides MRO services for a wide range of fixed and rotary wing aircraft, which through this partnership with Reliance Defence, can establish domestic services to tap the defence market in India, they said.
For RDL, this partnership is in line with the proposed facilities at the Dhirubhai Ambani Aerospace Park at Mihan in Maharashtra, spread over 400 acres and adjacent to the International Airport at Nagpur.