SOURCE: RAUNAK KUNDE / NEWS BEAT / IDRW.ORG
French aerospace giant Dassault Aviation is making a significant move to take full ownership of Dassault Reliance Aerospace Ltd (DRAL), located within Nagpur’s MIHAN Special Economic Zone (SEZ). This bid comes as Dassault aims to secure a contract for manufacturing Rafale jets in India under the Medium Multi-Role Fighter Aircraft (MRFA) tender for 114 jets from the Indian Air Force (IAF). However, this proposal is encountering resistance from the Indian Ministry of Defence (MoD).
Dassault’s pursuit of 100% ownership of DRAL is driven by its desire to have absolute control over the supply chain within India. The French firm argues that this control is crucial for meeting both domestic and export demands efficiently. While parts for Rafale jets are already being sourced from DRAL, the facility requires significant investment and expansion to be capable of assembling the jets domestically.
Despite Dassault’s assurances, the Indian MoD remains unconvinced. One major concern is Dassault’s ability to adhere to the mandated 70-75% local sourcing of components and equipment for the jets to be built in India. The MoD fears that the initiative could merely result in an assembly plant, dependent on kits supplied by Dassault’s French facilities.
Sources close to idrw.org have indicated that granting Dassault full ownership of DRAL could mean that the funds allocated for the Transfer of Technology (ToT) would primarily benefit Dassault and the Indian private sector companies it partners with. This raises concerns about the actual technological and industrial benefits to the broader Indian defence sector.
The Rafale jet comprises over 40,000 small and large components, making it impractical to scrutinize each part to ensure local sourcing. This complexity adds to the scepticism within the Indian MoD about Dassault’s proposal. The Ministry is wary that despite Dassault’s control over DRAL, achieving a high percentage of local content may remain elusive.
Dassault contends that full control over DRAL would enable it to guarantee the quality of Rafale jets produced in India, making the facility viable for manufacturing jets for the export market. The French company argues that export customers would prefer their orders to be fulfilled from France if DRAL continues to be controlled by Reliance Aerostructure Limited, a wholly-owned subsidiary of Reliance Defence Limited.
As negotiations continue, the Indian MoD’s skepticism poses a significant challenge to Dassault’s ambitions. The French aerospace major will need to provide robust assurances and detailed plans to address the Ministry’s concerns about local sourcing and the strategic benefits to India’s defence industry.
Dassault’s bid for complete ownership of DRAL is a strategic move aimed at securing the MRFA tender and enhancing its position in the Indian defence market. However, the Indian MoD’s concerns about local sourcing and the broader implications for India’s defence ecosystem highlight the complexities of such international defence collaborations. The outcome of these negotiations will have far-reaching implications for the future of Rafale production in India and the broader Indo-French defence partnership.
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