Israel’s Rafael Advanced Defense Systems and the Indian Reliance Defence company have signed today at Defexpo 2016 a joint venture (JV) that will provide the local content of major defense programs Rafael is already involved with and intends to compete in. The JV, one of the biggest joint ventures between an Indian company with a foreign OEM, addresses current and future programs, with potential value of more than US$10 billion (Rs 65,000 Crore) over the next ten year.
Among the areas of activity for the new JV are air/air and surface/air missile systems, in which Rafael is among the world’s leaders. Rafael is already involved in several Indian air-defense programs, including Barak-1, Barak-8 and Spyder. The company is also offering the Indian Navy the new C-DOME, a navalized version of the Iron Dome system, for shipborne air defense.
Another area of activity for the JV will be large aerostats, for which Rafael provides a range of combat-proven solutions. Rafael has already provided large aerostat systems to the Indian Air Force, meeting it’s surveillance, reconnaissance, communication and intelligence needs. The JV is positioned to compete for follow-on sales of such systems, required to tighten air surveillance and wide area coverage along the northern territory.
[ismember]Rafael already has ongoing local manufacturing agreements with several Indian companies, including public sector company Bharat Dynamics (BDL) for the production of Spike guided missiles and Barak 8 (LRSAM/MRSAM) missiles, and with Bharat Forge, providing various land and naval vehicle modernizations.
This is not the first time RAFAEL is setting a major JV in India. In 2012 the Israeli company and Mahindra announced the formation of a similar endeavour to develop and manufacture products such as anti torpedo defence systems and electronic warfare systems for the Navy, and advanced armouring solutions and remotely operated weapon stations for the Indian Army’s Futuristic Infantry Combat Vehicles (FICV). However, this venture was rejected by the Foreign Investment Promotion Board (FIPB) and the deal was turned off in December that year. The current JV is expected to go through a similar approval process.
Two years later, in February 2015 Rafael and the Indian Kalyani Group have struck a similar deal with Rafael, in which the Kalyani group holds 51% and Rafael 49%. This JV was likely to take over the remnant areas of activities the JV with Mahindra was supposed to cover – particularly missile technologies, remote weapon systems and advanced armour solutions.[/ismember]
Private sector company Reliance Defence Ltd. is a wholly owned subsidiary of Reliance Infrastructure Ltd. Rafael Advanced Defence Systems Ltd is an Israeli company owned by the Israeli government. Reliance will have 51% holding in the JV with Rafael holding the remaining 49%, per the current guidelines of Government of India.
The Joint Venture will be located at Dhirubhai Ambani Land Systems Park, Pithampur, Indore in the state of Madhya Pradesh and will generate more than 3,000 highly skilled jobs. The project will have an initial capital outlay of more than Rs 1,300 Crore, ($200 million) excluding the cost of technology.
The two companies, through the Joint Venture will offer the entire range of products in these fields to the Indian Armed Forces. Rafael is also willing to offer solutions through the Joint Venture even for the ongoing “Buy Global” programs where it is currently competing, in line with “Make in India” initiatives of the Indian Government.
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