Anil Ambani’s Reliance Group has signed an agreement with the manufacturer of Rafale fighter jets Dassault Aviation, Reuters reported on Monday. The tie-up aims to assist the French defence firm invest around Rs 30,000 crore in India as part of the company’s €7.87-billion (approximately Rs 59,300 crore) Rafale jet deal with the country.
The joint venture follows the imposition of a new condition in the Indian defence sector that foreign defence suppliers invest a part of their earnings from their contracts with the government to help the country develop its defence manufacturing sector. India is trying to reduce its reliance on imports by building its manufacturing base.
Dassault Aviation has agreed to invest 50% of its offsets from the Rafale deal with the Indian government to supply 36 units of the fighter jet. Reliance will use its alliance with the French firm to foray into defence manufacturing at its factories in Nagpur. Unnamed officials told Reuters that the funds from the tie-up between Reliance and Dassault will be used to develop Reliance-made products as well as those of other Indian manufacturers.
Dassault Chief Executive Eric Trappier said, "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 to develop strategic industrial partnerships under the 'Make in India' policy promoted by the Indian government." Unnamed officials told Reuters that Reliance had pitched for government deals worth Rs 840 billion in May. Other Indian firms seeking to enter the defence sector are Tata Group, Mahindra Group and Larsen & Toubro Ltd.