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Reliance Defence partners Diehl for precision-guided munitions in India
Reliance Defence and Diehl Defence tie up for local production of 155 mm guided munitions in Ratnagiri, with Rs 5,000 crore investment planned over five years
Mumbai
Anil Ambani's Reliance Defence (R-Defence) has tied up with Germany-based Diehl Defence to produce next-generation terminally guided munitions (TGM) for the Indian armed forces.
The partnership with Diehl will drive local production of the Vulcano 155 mm precision-guided munition system, R-Defence stated.
As part of the agreement, R-Defence will establish a large, high-tech, greenfield, integrated ammunition and explosive manufacturing facility in Watad Industrial Area in Ratnagiri, Maharashtra.
'This strategic alliance not only accelerates the advancement of India's defence manufacturing capabilities, but also positions Reliance Defence as a pivotal player in the global defence supply chain,' Ambani, founder and chairman of the Reliance Group, said.
In May, the company had tied up with another Germany-based defence firm, Rheinmetall AG, to supply the explosives and propellants for medium- and large-calibre ammunition.
The facilities for the above-mentioned partnerships in Ratnagiri will be established with an investment of ₹5,000 crore over the next five years, a company source stated.
R-Defence is aiming to start manufacturing in the next 18 months, as it has the land and principal approvals for the plant in place.
The company aims to fund 30 per cent of the investment via equity and the other 70 per cent via debt. The equity is likely to come from the company's internal cash accruals, the source said.
R-Defence aims to be amongst the country's top three private defence exporters in the next 12 to 24 months. It is likely to sign long-term agreements with firms like Diehl and Rheinmetall for 5 to 10 years in the coming months.
The partnerships are a part of the company's ammunition-focused strategy, where the products made in India will have 60 per cent indigenous content. It is eyeing the market opportunity to potentially generate ₹10,000 crore in revenue through the development and supply of advanced ammunition systems.
This tie-up with Diehl is also Reliance Group's fourth global partnership, expanding upon its established collaborations with Dassault Aviation, Thales Group of France, and Rheinmetall.
Additionally, Diehl Defence's product portfolio includes air defence systems, missiles for all branches of the armed forces, and ammunition for the army, air force, and navy, as well as protection systems, generating annual sales of over 2 billion euros.
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