French aviation conglomerate Dassault Aviation is currently considering the acquisition of Anil Ambani’s Reliance Defence stake in their joint enterprise, Dassault Reliance Aerospace Limited (DRAL), which operates a manufacturing facility in Nagpur.
Industry insiders have revealed that the French company has already initiated discussions with Reliance Defence regarding the purchase of the stake. The expansion of the plant has been put on hold due to the inability to inject additional funds into the project.
While Dassault Aviation currently possesses a 49% stake in the joint venture, Reliance Defence holds 51%.
The collaboration between Dassault and Reliance was announced on 3 October 2016, a mere two weeks after India signed a 7.8 billion-euro agreement for the procurement of 36 flyaway Rafale jets.
Initially, the joint venture aimed to recruit and train 650 employees by 2022, with the ultimate goal of manufacturing a complete Falcon business jet in Nagpur. However, these plans have been disrupted by the reported financial challenges faced by Anil Ambani.
Sources indicate that Dassault Aviation is hopeful that clearances will be granted since India permits 100% foreign direct investment (FDI) on a case-by-case basis. Initially, Dassault Aviation had been exploring the possibility of partnering with another Indian entity, but it has now decided to proceed independently.