Dassault Aviation chief has now come on record to say that its JV with Reliance Defence is geared towards meeting about 10% of this offset obligation for the Rafale fighter jet deal

by Manu Pubby

Reliance Defence could get just over 3 per cent of the Rs 30,000-crore Dassault Aviation offsets contract, contrary to the impression that it is the biggest beneficiary of the Rafale fighter jets deal. The joint venture, Dassault Reliance Aviation Limited (DRAL), will see an investment capped at €100 million (Rs 850 crore) for setting up a plant to manufacture parts for Falcon executive jets, ET has learnt.

Additionally, a smaller investment would be made for a joint venture with avionics and radar manufacturer Thales, which is also setting up an assembly plant for radars adjacent to the DRAL complex in Nagpur, ET has been informed.

Officials pointed out that offsets for Rafale are divided into four parts between Dassault (the integrator), Thales (radars and avionics), Safran (engines and electronics) and MBDA (weapons). Out of the total commitment of Rs 30,000 crore, Dassault Aviation has to invest in offsets to the tune of Rs 6,500 crore, according to Air Marshal R Nambiar, deputy chief of air staff till last month.

Dassault Aviation chief Eric Trappier has now come on record to say that its joint venture with Reliance Defence is geared towards meeting about 10 per cent of this offset obligation for the Rafale fighter jet deal.

“Dassault Aviation decided to set up DRAL joint venture with Reliance and build a plant in Nagpur, which should enable us to meet about 10 per cent of the offset obligations. We are in negotiations with about a hundred Indian companies and partnerships have already been concluded with about thirty of them,” the executive said in an interview to AFP.

ET has learnt that though the offset plans have not been formalised and presented to the government yet, there is still time as per the policy till October 2019 to share details with the ministry — the share of offsets for Reliance Defence in the deal could be capped at about 3 per cent of the total offsets.

Other beneficiaries of the contract include the Defence Research and Development Organisation for which negotiations are on to revive the Kaveri jet engine programme. French manufacturer Safran is in talks with the Indian team to work out modalities, including work share and transfer of technology that could be counted towards meeting the offset obligations.

Safran is also likely to discharge a part of its commitments through Hindustan Aeronautics Limited with which it has a joint venture to manufacture helicopter engines. Thales is likely to have defence public sector unit Bharat Electronics Limited as a major offset partner, besides Larsen and Toubro.