Offset obligation: Reliance Defence, Thales to form JV

Note4students:

Mains Paper 3: Science and Technology | Science and Technology- developments and their applications and effects in everyday life; indigenization of technology and developing new technology

The newscard talks about a Joint Venture between India and France.

Following things are important from UPSC perspective:

Prelims Level: Know about the what, where and how of this Joint Venture

Mains Level: Make note of the advantages, and implications of JV Context


Context:

  1. French aerospace and defence technology major Thales and Reliance Defence announced their decision to set up a joint venture company in India
  2. It is to leverage and execute Thales’ $1-billion (Rs 6,500 crore) offset obligation against 36 Rafale combat aircraft being bought by India

Where?

  1. The JV will develop Indian capabilities to integrate and maintain radars and manufacture high-performance
    airborne electronics
  2. It will execute this offset from its proposed greenfield facility

Shareholders:

  1. Within the proposed JV, Reliance Defence will have a 51% shareholding
  2. The remaining 49% will be held by Thales. Thales is a leading supplier of radars, electronic warfare solutions
    and software to Dassault Aviation that manufactures Rafale jets

What does the JV imply?

  1. The strategic partnership with global leader Thales will be a major milestone in the march towards best in the
    class manufacturing at support facilities for military hardware in India
  2. Moreover, it was Reliance’s commitment to the government’s ‘Make in India’ and ‘Skill India’ initiatives

Advantages of JV:

  1. The JV would develop skills and activity in the Special Economic Zone of Mihan-Nagpur
  2. It is together with an Indian supply chain for the manufacturing of microwave technologies and high
    performance airborne electronics
Make in India: Challenges & Prospects
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