October 3, 2016

Reliance Infrastructure, Dassault Aviation form JV; to execute Rafale deal’s offset clause

Dassault Reliance Aerospace JV will be key in the execution of the offset obligations of Dassault Aviation as a part of the 36 Rafale fighter jets deal.
Days after the Modi government signed the crucial Rafale fighter jets deal with France, Reliance Infrastructure and Dassault Aviation (manufacturer of the Rafales) have announced setting up a joint venture called “Dassault Reliance Aerospace”. This JV will be key in the execution of the offset obligations of Dassault Aviation as a part of the 36 Rafale fighter jets deal. The Rs 59,000 crore Rafale deal was signed on September 23 and contains a 50% offset obligation. This is reportedly the largest ever offset contract in India’s history. According to the release, the proposed strategic partnership will also focus on promoting Research and development projects under the IDDM program (Indigenously Designed, Developed and Manufactured), a new initiative of India’s Defence Minister Manohar Parrikar.
 This new JV will support Prime Minister Modi’s “Make in India” and “Skill India” policies and develop major Indian programs with high levels of technology transfer to benefit the entire aerospace sector, the release added.Commenting on the JV, Anil Ambani, chairman of Reliance Group said, “This is a transformational moment for the Indian Aerospace sector and for Reliance Infrastructure’s subsidiary Reliance Aerospace.” “We are delighted to partner a world leader in aviation like Dassault Aviation, and a visionary leader like Eric Trappier,” he said.

Eric Trappier, Dassault Aviation Chairman & CEO said, “The formation of this Joint venture with Reliance Aerospace led by Anil Ambani’s Reliance Group illustrates our strong commitment to establish ourselves in India and to develop strategic industrial partnerships under the “Make in India” policy promoted by the Indian Government.” For the Modi government, the Rafale fighter jet deal is a big feather in the cap The MMRCA deal for IAF had been initiated by the UPA government during its term, but it had been stuck. India has reportedly saved 750 million Euros, from the original price that France had quoted.
 In January this year, France President Francois Hollande had come to India, and the price that had been quoted was 8.6 billion Euros. India had then refused to sign the contract, but after multiple rounds of talks the final price that was agreed on was 7.878 billion Euros.
The most important aspect of the deal, apart from the fact that the Rafale is a 4.5 generation fighter jet, is the firepower that India is getting in the form of long-range and Beyond Visual Range (BVR) missiles. Rafale fighter jets will come equipped with state-of-the-art missiles such as the Meteor and Scalp.
The Meteor is a BVR air-to-air missile, with a range in excess of 150 km. With these missiles, the Rafale fighter jet will be a big strategic weapon in the hands of the IAF. The Meteor missile’s integration on the Rafale jets implies that IAF can now hit targets inside not only Pakistan but also across the northern and eastern borders, while still staying within India’s own territorial boundary.


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