Rafale deal: Reliance, Dassault Aviation set up joint venture

Oct 6, 2016 18:13 IST

In a major deal for India's private defence industry, Anil Ambani-led Reliance Group and Rafale maker Dassault Aviation on 3 October 2016 announced a joint venture in India.

The companies in a joint statements said, the entity will be a key player in execution of offset contract worth about 22000 crore rupees as part of the fighter jet deal. Purpose of the Joint Venture is to focus on promoting Research and development projects under the IDDM program (Indigenously Designed, Developed and Manufactured), a new initiative of India’s Defence Minister Manohar Parrikar.

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This new joint venture called Dassault Reliance Aerospace will develop major Indian programs with high levels of technology transfer to benefit the entire aerospace sector. The Joint Venture was announced by Dassault Reliance Aerospace within days of India and France signed agreement for 36 Rafale fighter jets value of 59,000 crore rupees (7.87 billion Euros). The agreement on Rafale jets was inked on 23 September 2016.

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 74 per cent of it has to be imported from India, which means direct business worth around 22000 crore rupees. There is also a technology-sharing component, which is being discussed with the Defence Research and Development Organisation (DRDO).

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.

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