New Delhi: Billionaire Anil Ambani's Reliance Group is venturing into a new sector of defense manufacturing to explore the market which is expected to grow upto $100-billion in 10 years.
With this, the group will join the likes of Reliance Industries, the Tata Group, L&T and Mahindra Group.
The group which spreads from telecom to infrastructure and financial services to power has set up Reliance Defense and Aerospace (RDA) as a wholly owned unit of Reliance Infrastructure Ltd, and named Rajesh Dhingra, a former managing director of Lockheed Martin India, as its head. The same has been confirmed by a report of Economic Times.
RDA will bid for contracts to make helicopters for the Armed Forces.
Group chairman, Anil Ambani said, “The 'Make in India' initiative of the government provides a perfect landscape for setting up of a comprehensive defense industrial base in the country.”
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He further told that through this, the group is aiming at bringing world-class technologies to home, improve local skill sets, cut down on import of defense products and create jobs.
People close to the matter said that company is also in talks with some of the international companies like Eurocopter of France, Kamov of Russia, and Sikorsky of the US, for technological tie-ups although the group has yet not confirmed the same.
Currently, India spends around $16 billion on buying new defense equipment and products. 60% of these purchases are imported hence prompting the government to include local defense production as major thrust area under ‘Make in India' umbrella.
Earlier, the foreign investment rules in defense pegged at 26% which, after NDA government came to power, have reached to 49%.
In addition, investments above this mark will be allowed by the government on case-by-case basis on approval by the Cabinet Committee on Security.
Rajesh Dhingra, the newly appointed head of RDA, said that the current gap between requirement of Armed Forces and domestic production base in India is a big opportunity for India's Private sector.
He said, “The Company will also explore production opportunities in other segments, including building naval platforms, air mobility, avionics and Network Centric Warfare (NCW), which broadly is networked technology to provide an advantage on the battlefield.”
It will seek industrial licenses specific to each contract that they bid for, Dhingra added.
As told by the daily, some of the contracts that RDA will be bidding for -- once request for proposals are floated -- include 100 naval utility helicopters estimated to be worth around $1.5 billion; 387 light utility helicopters worth $2 billion; six submarines worth $10 billion; 106 basic trainer programs worth $1.3 billion; and 123 naval multi role helicopters worth $4 billion, among others."
