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Dassault and Reliance ADAG cleared to form Rafale joint-venture in India

In late January, the Competition Commission of India cleared Dassault and Reliance Anil Dhirubhai Ambani Group (ADAG) to form a joint venture to lead the Indian Air Force’s (IAF) Rafale acquisition program.

The Government of India inked the USD $8.85 billion purchase of 36 Rafales in September, and in October, Dassault began implementing its portion of its offset commitments (to India) by announcing a partnership with Reliance ADAG.

Dassault Group and Reliance ADAG – specifically Reliance Aerostructure – will now build a 100-acre facility in Nagpur, which is expected to produce 1,500 jobs in the next seven years. As per the Press Trust of India, Reliance Aerostructure will own 51% of the facility, while Dassault with hold the remaining 49%.

Notes & Comments:

Roughly 50% of the value of the Rafale contract is to return to India through offsets, and while the $5.84 billion (for the Rafales and their maintenance package) also includes the engines and electronics, the airframe will still constitute a significant portion of the cost. Thus, Reliance ADAG will see a considerable amount of work and – if not already – it will become a serious domestic competitor to Tata Group, whose growth was carried by India’s offset agreements with Boeing.

With Dassault and Reliance ADAG on one end and Tata Group and Boeing on the other, the Indian Navy’s forthcoming competition for 57 multi-role carrier-borne fighters (MRCBF) should be very competitive. Both Dassault and Boeing have a directly addressable market, and in turn, both companies have ready-to-operate Indian partners to execute offset promises. A third competitor in the naval requirement is difficult to envision, especially as they lack the industry footprint and the credibility with the armed forces.

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  • by MT
    Posted February 6, 2017 3:26 am 0Likes

    Anil Ambani owned part of Reliance is pilled with debts. Yes it can still borrow cheap money bcoz of its communication business

    it has had no prior experience in defence sector. So it’s blunder allowing them tie up with Dassault.
    They may have invested big amount in Pipavav ship building but tata,l&t, Mahindra are the only companies with aeronautical engineering experience in end to end business

    Dassault most offsets will involve consultancy nd tech transfer to DRDO research labs so at its best reliance will get nothing more than kit assembly tool; painting/stealth coating material for rafale. Reliance entry is only going to increase the cost of end to end services.

    If they want to be treated seriously then they should acquire some western companies in defence sector

  • by Steve
    Posted February 6, 2017 6:40 am 0Likes

    Technology especially critical technologies are NEVER transferred as a rule. Low end labour intensive work will be transferred. Anyway something is better than nothing. Good luck to India trying to get technology out of the French who are notoriously expensive and reluctant to give away anything, like happened with Scorpene.

  • by MT
    Posted February 6, 2017 1:03 pm 0Likes

    They gave what was agreed 30-35% indigenous tech for scorpene along with detailed design specifications. Turbofan engine stealth coatings nd some others stuffs ll come for rafale. So it’s advantage India with offset. DRDO would have taken 7-8yrs to fine tune their Kaveri but Safran help ll get it done in 24months. So engine deal ll put India In league of china which spent more than 20-30bill $ n turbofan development

    India is capable to build nuclear-powered submarine but small lighter 2000ton diesel submarine require sophistication nd miniatured subsystem.

    Indian companies such as Larsen & tubro claim to bid solo for project 75i the next gen SSK as they r mostly involved in design/manufacturing of Arihant class first 4submarine

  • by K Venkata Vijaya Bhaskar
    Posted February 7, 2017 1:36 am 0Likes

    why ambani who has not even built a moped…why did goi not selected some other co like mahendra or tata….

  • by Superior Shakeel
    Posted February 7, 2017 4:22 am 0Likes

    True however they are transferring the most critical tech the turbofan engine tech in the form of offsets for their Kaveri engine which was lacking in thrust which I think is going to boost their aerospace sector especially military aviation As they are okay in other sectors engine was the one thing they were absolutely lacking much like china which after all that copying and stealing IPR is still struggling.

    Also apparently this is due to the Americans because French want to deny them Indian market and are trying to fight for the global defence pie and if you look closely and read the fine print the 57 naval fighter is tailor made for the rafale itself I guess what that parikrama dude said was right about this all along.

  • by Headstrong
    Posted February 7, 2017 10:54 am 0Likes

    So as to build up competition. Tata is already collaborating with Boeing. Mahindras is likely to tie up with SAAB. More companies, more competition – better costing.
    I hold no brief for the Ambanis, but they have been hiring a lot of experts over the past two years. Who knows – they may even pull it off. They have made a success story of many ventures which were not their traditional strongholds in the past

  • by Steve
    Posted February 7, 2017 6:33 pm 0Likes

    The French will definitely not create future competitors by giving turbofan single crystal blade technology. Only if they determine the Indians are going to make it anyway and may shorten development time in return for millions of dollars

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