May 22, 2015

Reliance Infra seeks Russian partner to make submarines, ships at Pipavav Defence

Anil Ambani-led Reliance Infrastructure, which recently acquired an 18 per cent stake in Pipavav Defence & Offshore Engineering, is scouting for an international joint venture-cumtechnology partner in Russia to locally manufacture nuclearpowered submarines and stealth warships at Pipavav in Gujarat. Pipavav Defence is India’a largest defence shipyard with a permit to manufacture warships.
Top Reliance Group executives are in Moscow where they met senior officials in Russia’s defence ministry and are also likely to call on Russian defence minister Sergey Shoigu this week to identify a potential Russian JV partner with the requisite technology expertise for manufacturing warships in India, a person aware of the discussions told ET.
The JV may involve one of the defence subsidiaries of Reliance Infrastructure, the person cited above said.
In February, Reliance Infrastructure had floated three subsidiaries – Reliance Defence Systems, Reliance Defence Technologies and Reliance Defence & Aerospace – to pursue emerging opportunities in the defence sector. This was on the heels of the Cabinet Committee on Security (CCS) approving plans for locally manufacturing six nuclear-powered submarines and seven stealth warships at an investment outlay of awhopping Rs 1 trillion.
Reliance Infrastructure, it is learnt, is keen to finalise an international technology partner at the earliest as it is likely to aggressively pitch for the Centre’s Rs 60,000-crore defence contract for locally manufacturing six nuclear submarines.
“We are deeply committed to investments in the defence sector and the PM’s Make In India programme,” said a Reliance group spokesman in an emailed response to ET’s queries on its quest for a Russian JV partner.
The Russian government declined to share specifics but said it is open to talks with Indian partners. “The Russian side is open to negotiations with Indian partners on various projects, including cooperation and JV to manufacture modern defence equipment,” SV Karmalito, senior counselor in the Russian embassy, said in an emailed response to ET’s queries.
The discussions are learnt to have focused on finding a suitable JV partner for building six modern conventional submarines in India through technology transfer from the foreign collaborator.
In August 2014, the Modi government had increased the foreign direct investment ( FDI) limit for defence manufacturing to 49 per cent from 26 per cent.
Late last year, Reliance Group hired ex-Lockheed India MD Rajesh Dhingra to drive diversification into the defence sector. Dhingra, who is president at Reliance Defence, is closely involved in zeroing in on an international JV partner for the warship manufacturing project.
Reliance group officials had earlier visited China, Latin America, the US and Finland in their quest for a potential global technology partner, and have now set their sights on a potential Russian collaborator.


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