NEW DELHI — Dassault Aviation of France and its Indian partner Reliance Defence launched Wednesday an industrial partnerships initiative with 50 Indian defense companies and 20 French companies to kick-start offset partnerships for a €7.8 billion (U.S. $8.7 billion) Rafale fighters deal.

India and France signed the intergovernmental agreement on Sept. 23, 2016, under which 36 Rafale fighter aircraft in flyaway condition were to be procured from Dassault Aviation for the Indian Air Force.


Per the contract, France will invest 30 percent of the €7.8 billion in India's military aeronautics-related research programs and 20 percent into domestic Indian production 
of Rafale components with Indian industry to fulfill the mandatory offsets under the deal.


Dassault Aviation and Reliance Defence co-hosted a business meeting to set up industrial partnerships between Indian and French defense companies, including major Rafale industrial partners such as Thales, Safran and MBDA.


"In keeping with the Skill India plan of the Union [Indian] Government, this B2B [business-to-business] interface between the French and domestic Indian entrepreneurs aims to deepen existing links, create new opportunities of collaboration and work towards establishing a full-fledged defense manufacturing eco-system in India," according to a Reliance Defence news release.


"The ambition is to develop a complete supply chain allowing the completion of the existing ambitious Rafale offsets obligations under the Rafale contract signed in September 2016 and build a strong base for the success of Rafale under the Make in India initiative," the company added.

Dassault Aviation and Reliance Aerostructure Limited, a subsidiary of Reliance Defence, last year announced a joint venture known as Dassault Reliance Aerospace Limited with the goal of setting up an aerospace facility in Nagpur, central India, to create a supply chain for Dassault programs in India.


Reliance Aerostructure Limited controls 51 percent shareholding in the joint venture company while the remaining 49 percent equity is held by Dassault Aviation.


Dassault Aviation executives were unavailable for comment.


"It needs to be seen and understood as to what value addition the Indian private industry can make under offsets for the existing Rafale contract, as they will mostly be delivered in flyaway condition due to delivery timeline constraints," according to 
a senior executive of a leading Indian private defense company who attended the meeting. "Offsets are likely to be more indirect in nature such as long-term support, relevant global supply chain requirement, material sourcing, etc."


Another executive of an Indian state-owned defense company said it's unclear how the collaboration process will work when it comes to working with local companies for supplies.

Vivek Raghuvanshi is the India correspondent for Defense News.

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