Reliance Defence, a wholly-owned subsidiary of Reliance Infrastructure and Russian United Shipbuilding Company (USC) will build four Talwar class frigates for the Indian Navy. Both the companies are expected to sign a pact in this regard on Thursday in Moscow, which coincides with Prime Minister Narendra Modi's visit there.
These four frontline warships will be built at a cost of around Rs 30,000 crore at the recently acquired shipyard at Pipavav, Gujarat.
The agreement also includes a partnership for refit and modernisation of all Indian Navy surface ships of Russian and Soviet origin at the Pipavav Shipyard. Currently, there are 35 Russian/Soviet-origin surface ships in the Indian fleet.
A Reliance Defence official, who did not want to be named, confirmed the singing of the agreement. He said the combined value of the two exceeds $10 billion (Rs 66,000 crore) over the next ten years.
He said the strategic cooperation agreement is the first one of its kind between a Russian Defence OEM (original equipment manufacturer) and an Indian private sector company. Recently, Reliance Infrastructure had acquired an additional 17 per cent stake in Pipavav Defence for an estimated Rs 850 crore through an open offer, taking its total holding to nearly 35 per cent. The open offer was made by Reliance Infrastructure and its wholly-owned subsidiary, Reliance Defence Systems Pvt Ltd.
In March 2015, the company had acquired about 18 per cent stake from Pipavav Defence's promoters for Rs 819 crore.
The Competition Commission of India (CCI) and the Gujarat Maritime Board (GMB) have already approved the acquisition, together with management control of Pipavav Defence. Last month, Pipavav Defence had also announced plans to exit the corporate debt restructuring (CDR) package, after the open offer.