Dassault Reliance Aerospace for Future Needs of Indian Armed Forces

Dassault Reliance Aerospace Limited (DRAL) inauguration ceremony- The foundation laying ceremony of Dassault Reliance Aerospace Limited (DRAL) manufacturing facility took place on October 27, 2017 in Reika Hyde’s which covers the area of 280 acre. The cost is ₹ 6500 crore. The first stone was laid by Eric Trappier Dassault Aviation’s Chairman and the Anil D Ambani of Reliance Group in the presence of Ms. Florence Parly the Armed Forces Minister of the French Republic; and Shri. The present Union Minister of Road, Transport and Highways of India, Nitin Gillkarni, gave a speech. Shri Devendra Fadnavis, Chief Minister of Maharashtra; and H.E. Mr. Alexandre Ziegler, Ambassador of France to India, among others, made a special appearance.

A joint venture, Dassault Reliance Aerospace Limited (DRAL), set up in 2001 with 51% Reliance Aerostructure Limited and 49% Dassault Aviation, has Eric Trappier as Chairman and Anil Ambani as Co-Chairman. French major Dassault Aviation contributed in excess of €100 million as FDI to the joint venture which is the biggest such Defence FDI in one place in India, to meet the future requirements of Indian armed forces. The facility will focus on a few components under the ‘offset obligation’ attached to the 36-Rafale fighter jets purchase from France, which was reached between the governments of both sides in early 2016. According to this agreement, France transferred 36 Rafale jets to India at the cost of ₹ 59,000 crore; in return, French companies involved in the manufacturing of the aircraft had to invest 50% of the amount in the ecosystem of the local defence manufacturing industry, and to make the components locally.

DRAL will manufacture components for the Legacy Falcon 2000 Series of Civil Jets manufactured by Dassault Aviation and thus will become part of its Global Supply Chain. These first steps are expected to achieve in the coming years the possible setting up of final assembly of Rafale and Falcon Aircraft.

DRAL supporting Prime Minister Modi’s “Make in India” and “Skill India” policies will bring high levels of Technology Transfer and to accelerate India’s pursuit of self-sufficiency in the aerospace sector. It will train thousands of skilled workers in aviation assembly and integration, and lead to huge employment generation in Nagpur and its surrounding areas. It will also attract and house an organic ecosystem of over 200 MSME’s to secure the component and avionics manufacturing needs of Rafale and Falcon Jets.

The production from Mihan is expected to start in 2018. India will become the global manufacturing hub for Falcon aircraft as over a period of time, the entire aircraft will be made in India. Leading French companies will set up base in Mihan. The company has signed performance-based logistics support from the Indian Airforce for the next 35 years.
This is for the first time that a business jet will be manufactured in India.

DRAL has the maintenance contract for the 36 Rafale jets that have been ordered from France for 50 years. JV has focus on both defence and commercial aircraft. Reliance Group is increasingly focusing on defence manufacturing, which is a sunshine sector in the country after the government made it easier for private firms to bid for contracts. Reliance Defence expects ₹15 trillion opportunity in the defence sector over the next 15 years. In January 2015, the Group entered the Indian Defence manufacturing sector, acquired a state-of-the-art Naval Shipyard, and is rapidly developing its Air, Land and Sea Defence manufacturing capabilities in collaboration with leading global defence firms.

A report by industry association Federation of Indian Chambers of Commerce and Industry and Centrum Capital had estimated in February 2015 that India’s defence spending was likely to total $620 billion between FY14 and FY22. To tap into this opportunity, several Indian conglomerates, including the Mahindra Group, Tata group, Godrej and Larsen and Toubro, have evinced interest in participating in this sector and have struck strategic tie-ups to create capacity to cater to future defence contracts that the Indian government is expected to award.