Dassault Aviation of France has entered into a partnership with Reliance group to execute offsets for the recently concluded deal for 36 Rafale fighter jets.
The joint venture called “Dassault Reliance Aerospace” was jointly announced by Dassault Aviation Chairman & CEO Eric Trappier and Reliance Group Chairman Anil Dhirubhai Ambani.
“This is the largest offset contract to be executed by any defence company in India till date,” Reliance said in a statement on Monday as the contract value is estimated up to Rs. 30,000 crore.
“The proposed strategic partnership between Dassault and Reliance will also focus on promoting research and development projects under the IDDM program (Indigenously Designed, Developed and Manufactured)…,” the statement added, referring to the new provision introduced in the Defence Procurement Procedure (DPP) 2016.
Last month, India and France signed an Inter-Governmental Agreement (IGA) for 36 Rafale multi-role jets in fly-away condition worth €7.87 billion or about Rs. 59,000 crore. The deal has a 50 per cent offset clause to be executed by Dassault and its partners in India.
Industry sources said that the JV will focus on aero structures, electronics and engines and intends to infrastructure and supply chain in India for the aerospace sector.
A huge integrated facility is proposed to be set up at Reliance Special Economic Zone (SEZ) in Nagpur. Work is expected to begin in the next couple of months and production intended to begin within 12 months, sources told The Hindu .
“The offsets are only for seven years but the JV will be part of the global supply chain of Rafale jets to support the larger program,” one industry observer noted.
Given the scale of the contract, the JV will partner with 100 odd Micro, Small and Medium Enterprises (MSMEs) for sourcing and contracting.
The government expects the offsets to bring in much needed expertise to build the domestic defence and aerospace industry.
