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., Indias 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 IAFs 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 operations.
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
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
Notably, RIL had inducted Boeing Indias
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 Indias 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 studies.
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 or so.
RIL has already gone into sophisticated Homeland
Security systems to make cities secure, and signed
agreements with Raytheon and German Siemens in
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 public
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 MoDs 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.