Mihan takes off as Reliance lands

Nagpur: The Reliance Group plans to start production at its unit in Mihan-SEZ from the first quarter of 2018. Two years after it was allotted land in the area, a foundation stone-laying function was held here on Friday with the company chief Anil Ambani turning up for the event. France's minster for Armed Forces, Florence Parly, state CM Devendra Fadnavis and Union Minister Nitin Gadkari too were present.

It will begin with making components for the Rafale warplanes and Falcon business jet made by France's Dassault Aviation. Eventually it is expected to fully assemble both the aircraft in the Nagpur unit in the coming years.

With projections to pump in Rs6,500 crore, this would be the biggest private sector investment in defence sector, and also the largest unit in Mihan. The unit is slated to create 700 direct jobs apart from 5,000 skilled jobs though ancillarization.

Reliance has tied up with Dassault Aviation to form the Dassault Reliance Aviation Limited (DRAL). The joint venture will be carrying out works under the offset obligation arising out of the deal to buy 36 Rafales from Dassault for the Indian Air Force (IAF).

The offset obligation, which comes to Rs30,000 crore, would be implemented mainly through the Nagpur plant. With an investment of 100 million Euros, Dassault the 49% partner in the joint venture will also be making the largest ever FDI in the defence sector.

However, assembling the aircraft will depend on Dassault getting more orders. The 36 Rafales, for which an order has been placed, will come in ready-to-fly condition. In India, the French is eyeing to bag the deal for supplying 57 Rafale planes for Navy too for which a request for information (RFI) has been issued.

It would be similar in the case of Falcon 2000s too. However, considering the market, Relaince will be setting up a facility having a capacity to make 22 business jets in a year. For Falcon it would begin with making components of the front structure of the aircraft.

"Initially our French counterpart thought that we would be setting up the unit at Bangalore or Hyderabad where the aviation sector is well-established. If not, the two they thought we may have a plant in Gujarat for obvious reasons. But I said its Nagpur," said Ambani.

"It was only because of the insistence of Nitin Gadkari that we chose a site here. Even chief minister Devendra Fadnavis was equally keen," he added.

The Reliance chief said the Dassault Reliance joint venture has also entered into a tie-up for providing logistical support for the Rafale fleet with the IAF for a period of 50 years.

Eric Trappier, the CEO of Dassault Aviation, said, "Apart from supplying the aircraft to IAF, the company is also keen to offer the 57 planes needed by Indian Navy. Assembling of the Rafale aircraft at the Nagpur unit would depend on the additional orders it gets. Even the IAF needed 126 aircraft originally but only 36 have been added to its fleet at present."

Parly, the French defence minister, said both France and India are natural allies. "Terrorism is faced by both the countries. We also share concerns over the developments in the Indian Ocean area and look forward for cooperation in terms of sharing information and defence assistance," she said. Parly also pushed France's case for selling the aircraft to the Navy.

Nitin Gadkari said the project will bring Nagpur on the forefront and create new jobs for the region. "Production will start in January 2018," he said.

Fadnavis said he hopes to fly from a Falcon 2000 made in Nagpur. "Incidentally, I flew down to the city in a Falcon along with Anil Ambani," he said.