(RIL) as its private sector partner to manufacture the Rafale Combat
jets in India.
Details are not known but Dassault confirmed the agreement with the
Mumbai-based Mukesh Ambani-led Indian conglomerate. It was signed a week
or so after the Government announced the Rafale as the winner in the
Medium Multi Role Combat Aircraft (MMRCA) fray Jan 31.
In a statement, the French company said: Dassault Aviation, a major
player in the global aerospace industry has entered into an MoU with
Reliance Industries Ltd., India’s largest private sector company, for
pursuing in strategic opportunities of collaboration in the area of
complex manufacturing and support in India.
Dassault manufactures Rafale combat jets and Falcon business jets, and
the proposed venture should foray into both these sectors.
Company sources also pointed out that much of the tooling and weapons of
IAF’s Mirage 2000, which are being upgraded to Mirage 2000-5 standards,
are common with those of the Rafale, and therefore it would be easier
to absorb the new generation technologies, both in manufacturing and
Authoritative sources told India Strategic that the two partners had also informed the Ministry of Defence (MoD).
Any such venture has to be cleared by the Government and several
procedural and security clearances would be needed in due course as
Reliance gets into the technology induction and manufacturing process.
As HAL is the lead integrator for the MMRCA project, the two companies will have to involve it also.
While in-principle approval for such collaborations already exists as
per the Defence Procurement Procedure (DPP), the Government has just
cleared an important proposal permitting the Defence Public Sector
Undertakings (DPSUs) like HAL to forge partnerships with private sector
companies to speed up technology induction as well as production of
strategic systems for the armed forces.
RIL, already the top group in India, should become the biggest Indian player in combat jets and allied military systems.
Notably, RIL had inducted Boeing India’s former head for defence
systems, Dr Vivek Lall, to lead a security and defence subsidiary. The
intention apparently was to utilize the opportunities offered by India’s
growing defence requirements, and the business that offsets would
generate for the Indian industry.
Dr Lall, an Indian with US citizenship, has the distinction to have
worked in the US National Aeronautics and Space Administration (NASA),
the war systems US giant Raytheon and then the civil and military
aviation world leader Boeing. He is credited as being one of the 2000
outstanding scientists in the entire world, and he was inducted as a
Distinguished Fellow recently at the RIL-funded think tank, the Observer
Research Foundation (ORF), apparently for initiating hi tech aviation
The cash rich Reliance should infuse billions of dollars in its new
partnership. There are timelines in the delivery of MMRCA, and this
venture should be able to exceed the turnover of HAL within five years
RIL has already gone into sophisticated Homeland Security systems to
make cities secure, and signed agreements with Raytheon and German
Siemens in this regard.
As per the terms of the Request for Proposals (RfP), issued by the
Indian Air Force (IAF) in 2007, HAL will be the prime integrator for the
selected aircraft. But the winning vendor would have the choice to go
in for private or public sector companies, for the 50 per cent offsets
commitments mandatory for the deal.
It may be recalled that there was a time when the defence industries
were open only to the private sector. But gradually, there has been
relaxation as the Indian private industry has been seeking a level
playing field with public sector companies in defence manufacturing.
There has also been the inability of some of the Defence Public Sector
Undertakings (DPSUs) to stick to time lines due to persistent labour
trouble, and in some cases poor workmanship resulting from seemingly
innocuous but otherwise serious problems like tobacco addiction among
employees. The armed forces have been looking at the private sector for
quality and timely delivery assurances.
How the Dassault-Reliance venture proceeds will depend on the
finalisation of the MoD’s negotiations over the acquisition of Rafale.
The RfP is for 126 aircraft with an option for 63 more. But over the
years, this number should go up to 300 as IAF is looking for 42 to 45
combat aircraft squadrons by 2022 or so.
Notably, IAF, Army and Navy also need transport aircraft. For instance,
IAF is looking for replacements for about 60 of its very old Avro
aircraft. The Dassault-RIL venture should also open the doors for
production of transport aircraft in India.