Reliance Defence signs ammunition pact with Serbia

Govt's military indigenisation plan has spawned another tie-up

The government’s military indigenisation plan has spawned another tie-up.

Anil Ambani-led Reliance Defence has entered into a strategic partnership with Serbia's state-run defence major Yugoimport to manufacture ammunition in India. The Serbian ammunition maker has offered to provide fully-compliant technical solutions to meet the ‘Make in India’ requirements of the Indian government.

Reliance, which has virtually no experience of defence manufacturing, is looking at turning into a defence major in the coming years. The company said it was targeting Rs 20,000 crore of business from the Indian armed forces over the next 10 years. 

“Two companies will work together in the field of ammunition, with a projected minimum requirement of Rs 20,000 crore over the next 10 years from the Indian armed forces,” Reliance Defence said.

The company will undertake manufacturing and develop future technologies at a greenfield facility, the location of which has not been decided yet.

In October 2016, the Reliance Group had entered into a strategic partnership with Dassault Aviation of France (Rafale) to execute the largest defence offset contract worth about Rs 30,000 crore. This was subsequent to Dassault Aviation getting a contract to supply 36 Rafale fighter aircraft to India for Rs 60,000 crore with 50 per cent offset clause. The deal with Dassault is a bet that Reliance can build manufacturing units at Nagpur to feed into Dassault’s supply chain, or for future orders of the Rafale jet.

Industry sources said timing of the partnership was critical as the defence ministry has recently issued eight requests for proposal (RFP) for different grades of ammunition up to April. The two companies will bid for the 122 mm Grad Rocket, 23 mm ammunition, 40 mm ammunition and 125 mm FSAPDS Tank ammunition. 

According to the executive, the requirement for ammunition is likely to go up as the government looks towards more indigenisation.