In a major boost to India’s push for indigenous manufacture of defence equipment, Reliance Defence has signed a JV with Israel’s Rafael Advanced Defence System for the production of air-to-air missiles, air defence systems and aerostats.
The consortium will produce weapons worth Rs.65,000 crore over the next 10 years.
Anil Ambani’s Reliance Defence will have a holding of 51 per cent in the JV. This partnership marks the entry of Reliance Defence in the manufacture of air defence systems in India.
Rafael is the foremost producer of some of the world’s deadliest short-range missiles.
Rafael is also the maker of Israel’s Iron Dome – the world’s best air defence system.
India has previously purchased the SPYDER and the Barak missiles from Rafael besides aerostats that help the Indian Air Force in surveillance, reconnaissance, communication and intelligence gathering.
The manufacturing plant of this JV will be located at Pithampur, Indore in Madhya Pradesh.
Reliance Infrastructure – of which Reliance Defence is a 100 per cent subsidiary – says that the venture will generate 3,000 highly skilled jobs.
The announcement of this JV follows Defence Minister Manohar Parrikar’s unveiling of India’s new defence procurement policy (DPP).
The DPP 2016, which will come into effect April 1, gives top priority to acquiring weapons to Buy (Indian — IDDM) followed by Buy (Indian), Buy and Make (Indian), and Buy and Make (Global). The direct purchase of defence systems from foreign makers, Buy (Global), has been given the last priority.
This new policy also encourages the private sector in manufacturing defence equipment and build a robust defence industrial complex in the country.
Besides Reliance, some other private companies in this sector are L&T, Mahindra, and Punj Loyd. L&T is making K9 Thunder, a self-propelled howitzer, in collaboration with Samsung Techwin of South Korea.
The Defence Minister has, however, ruled out 100 per cent privatisation in the defence sector.