In Anticipation Of Orders For More Rafales, Dassault Looks To Buy-Out Reliance's Stake In Nagpur Facility

French manufacturer of Rafale fighter jets — Dassault Aviation — is looking to buy-out partner Reliance's stake in the Nagpur-based Dassault Reliance Aerospace Limited (DRAL) joint-venture manufacturing facility.

This decision follows the recent announcement of the selection of Rafale-Ms for the Indian Navy's carrier-borne fighter during Prime Minister Narendra Modi's visit to France.

Under the deal, Indian Navy is planning to buy 26 Rafale — 22 single-seater Ralale-Ms and four double-seater Rafale-Bs, at an estimated cost of $5.5 billion.

Additionally, the Indian Air Force (IAF) is seeking to acquire 114 more fighters under the multi-role fighter aircraft (MRFA) project.

It is worth noting that the IAF already operates 36 Rafale aircraft, which were acquired in 2016.

Shortly after the Rafale deal was announced, Dassault and Anil Ambani-owned Reliance signed an agreement to establish the DRAL manufacturing unit in Nagpur, with Dassault holding 49 per cent and Reliance owning the majority stake of 51 per cent.

According to reports, Dassault is currently in talks with Reliance to acquire this 51 per cent stake in DRAL, in anticipation of more orders for the Rafale jets, from the Indian Armed Forces.

Initially, the facility was intended to manufacture parts of Dassault Falcon passenger jets, with future plans to assemble complete Dassault Falcons.

Dassault has also started manufacturing components for Rafale fighters, such as engine doors and canopies, to cater to the export market.

However, due to financial and legal troubles faced by Anil Ambani-led Reliance, including a severe cash crunch, little to no investment was made, leading to a slowdown in activities at the plant.

With the Indian government amending foreign direct investment (FDI) rules in the defence manufacturing sector to allow 100 per cent FDI on a case-by-case basis, Dassault hopes to receive approval to proceed.

If Dassault wins the MRFA project for 114 fighters, it is expected that the company will establish a manufacturing facility for Rafale fighter jets in India.