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Dassault Reliance Aerospace for Future Needs of Indian Armed Forces

Dassault Reliance Aerospace Limited (DRAL) manufacturing facility – foundation laying ceremony was held on Friday 27 October 2017, at ₹6,500 crore-spread over 289 acres, Dhirubhai Ambani Aerospace Park (DAAP), Mihan SEZ, near Nagpur Airport in Maharashtra. The Foundation Stone was laid by Eric Trappier, Chairman of Dassault Aviation and Anil D. Ambani, Chairman of the Reliance Group in the presence of Ms. Florence Parly, Minister of Armed Forces of the French Republic; Shri. Nitin Gadkari, Union Minister for Road Transport and Highways of India, and Shri. Devendra Fadnavis, Chief Minister of Maharashtra; and H.E. Mr. Alexandre Ziegler, Ambassador of France to India, besides other dignitaries.

Dassault Reliance Aerospace Limited (DRAL) an incorporated Joint Venture with 51% Reliance Aerostructure Limited and 49% Dassault Aviation, has Eric Trappier as Chairman and Anil Ambani as Co-Chairman. French major Dassault Aviation will invest over €100 million in the joint venture as Foreign Direct Investment (FDI), the largest such Defence FDI in one location in India, to address the future needs of the Indian armed forces. The facility will manufacture several components under the ‘offset obligation’ connected to the purchase of 36 Rafale Fighters from France, signed between the two Governments in September 2016. Under that agreement, France sold 36 Rafale jets to India for ₹ 59,000 crore; in return, French companies involved in the manufacture of the aircraft have to invest 50% of the amount in India’s defence manufacturing ecosystem and making 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.

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