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French aviation giant Dassault Aviation is reportedly in talks to acquire the stake held by Anil Ambani’s Reliance Defence in their joint venture, Dassault Reliance Aerospace Limited (DRAL). The joint venture operates a plant in Nagpur, which was established with the aim of expanding operations and manufacturing a complete Falcon business jet.

As per industry sources familiar with the matter, Dassault Aviation has initiated discussions with Reliance Defence to buy out their 51 percent stake in the joint venture. The move comes as further expansion of the Nagpur plant has been put on hold due to financial constraints and the inability to inject additional funds into the project.

Currently, Dassault Aviation owns a 49 percent stake in DRAL, and the remaining 51 percent is held by Reliance Defence. The joint venture was announced on 3rd October 2016, shortly after India signed a significant 7.878 billion-euro deal for 36 Rafale jets in flyaway condition from Dassault Aviation.

Considering India’s policy of allowing 100 percent foreign direct investment (FDI) on a case-to-case basis, Dassault Aviation is optimistic that the necessary clearances will be granted. Initially, the aviation major explored the possibility of finding another potential Indian partner, but it now seems determined to pursue full ownership of the joint venture.

The acquisition of Reliance Defence’s stake in DRAL could pave the way for Dassault Aviation to take complete control of the venture and further strengthen its presence in the Indian aerospace market. By assuming sole ownership, Dassault Aviation would have greater flexibility in driving the future growth and development of the Nagpur plant.

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