samlove
FULL MEMBER
- Joined
- May 4, 2013
- Messages
- 1,328
- Reaction score
- 2
- Country
- Location
Reliance Industries Limited (RIL) is gearing up to enter the defence space of India by investing and signing new deals with global market players to procure offset management of defenceequipments. With reports floating that there are apparent changes happening in the countrys defence procurement by giving more prominence to private sector companies, MukeshAmbani led RIL is already setting the sails according to the winds.
Reliance already has set up Reliance Aerospace Technologies and Reliance Security Solutions back in 2011.In order to come up with new strategies in the defence play, MukeshAmbani is planning to invest about $1 billion in the aerospace field over the next three years. The company is also planning to recruit2,000 engineers.
Gauging more opportunities ahead, RIL has also inked a deal with Boeing. Apart from this deal, RIL had also partnered with Dassault Aviation in 2012, to enter defence and home land security sectors in India. The countrys largest private conglomerate had applied for license to design, develop and manufacture equipments and components for military and civilian aircraft.
The objective behind both these deals by RIL was to get offset projects from global names that are looking forward to have a stake in India soon. Dassault Aviation and Boeing are already in contract with Indian Air Force and Indian Navy respectively. Dassault has to supply 126 medium multi-role combat aircraft whereas Boeing has to supply 20-24 P81 aircrafts.
Both these companies are in offset arrangement pact with RIL. According to the governments defence procurement policy, the multi-national companies are bound to plough back to India a fixed percentage of the value of the contract they win from Indian defence.
The future of RIL in the defence sector doesnt remain confined to winning offset projects only. It further plans to incubate tier-2 and tier-3 companies that provide components to tier-1 companies manufacturing the original equipment. According to report published by KPMG, Indian defence market is expected to be worth $94 billion by 2020. So, it is the correct time for RIL to enter this market.
The other players in this market are Tata Advanced Systems Limited, Larsen and Toubro, Kirloskar Brothers, Mahindra Defence Systems and Ashok Layland. But with RIL entering this space, as experts say, it has the capacity to replicate the same phenomenon it created in oil and gas market of the country.
Time will only tell this new defence story for Reliance Industries.
Reliance already has set up Reliance Aerospace Technologies and Reliance Security Solutions back in 2011.In order to come up with new strategies in the defence play, MukeshAmbani is planning to invest about $1 billion in the aerospace field over the next three years. The company is also planning to recruit2,000 engineers.
Gauging more opportunities ahead, RIL has also inked a deal with Boeing. Apart from this deal, RIL had also partnered with Dassault Aviation in 2012, to enter defence and home land security sectors in India. The countrys largest private conglomerate had applied for license to design, develop and manufacture equipments and components for military and civilian aircraft.
The objective behind both these deals by RIL was to get offset projects from global names that are looking forward to have a stake in India soon. Dassault Aviation and Boeing are already in contract with Indian Air Force and Indian Navy respectively. Dassault has to supply 126 medium multi-role combat aircraft whereas Boeing has to supply 20-24 P81 aircrafts.
Both these companies are in offset arrangement pact with RIL. According to the governments defence procurement policy, the multi-national companies are bound to plough back to India a fixed percentage of the value of the contract they win from Indian defence.
The future of RIL in the defence sector doesnt remain confined to winning offset projects only. It further plans to incubate tier-2 and tier-3 companies that provide components to tier-1 companies manufacturing the original equipment. According to report published by KPMG, Indian defence market is expected to be worth $94 billion by 2020. So, it is the correct time for RIL to enter this market.
The other players in this market are Tata Advanced Systems Limited, Larsen and Toubro, Kirloskar Brothers, Mahindra Defence Systems and Ashok Layland. But with RIL entering this space, as experts say, it has the capacity to replicate the same phenomenon it created in oil and gas market of the country.
Time will only tell this new defence story for Reliance Industries.
