French Firm Dassault Chooses India's Reliance Group in Rafale Aircraft Deal
Following the signing of an Intergovernmental Agreement (IGA) with India, Dassault Aviation was required to choose an Indian partner for investing a half the amount of $8.7 bln Rafale deal under Offset Clause.
NEW DELHI (Sputnik) – Dassault Aviation has teamed up with India's Reliance group to invest $4.51 billion in India. Dassault Aviation has agreed to invest 50% under an offset clause of the $8.7 billion Rafale deal it signed with India.
The offset policy is a mandatory provision of India's Defense Procurement Policy which requires foreign vendors to invest a portion of the deal amount in India. The rationale behind such provision is to encourage foreign companies to invest in research and development, which would eventually make Indiam, the world's biggest arms importer, self-dependent in defense equipment manufacturing.
"The 'Dassault Reliance Aerospace' Joint Venture will be a key player in the execution of offset obligations, as a part of the 36 Rafale fighter jets purchase agreement at a value of €7.87 billion, or about Rs. 59,000 crore signed between France and India on September 23, 2016. The agreement includes a 50% offset obligation which is the largest ever offset contract in the history of India," a statement released by Reliance group read.
"The formation of this joint venture with Reliance Aerospace led by Anil Ambani's Reliance Group illustrates our strong commitment to establish ourselves in India and to develop strategic industrial partnerships under the "Make in India" policy promoted by the Indian Government," declared Eric Trappier, Dassault Aviation Chairman & CEO.
Reliance group had entered the Indian Defense manufacturing sector in January 2015. The net worth of the Group is $16 billion and the total asset base is $43 billion.
India is expecting a delivery of the first Rafale jets within 36 months of signing the deal in September 2019.
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