Dassault Aviation Gains Majority Control in Indian Joint Venture with Reliance

Dassault Aviation Acquires Majority Control of Indian Joint Venture: Strategic Shift in Global Aerospace Manufacturing

The recent acquisition by French aerospace leader Dassault Aviation of a 2% stake in its joint venture with Anil Ambani’s Reliance Group marks a pivotal moment in India’s aerospace sector. This move, valued at Rs 175.96 crore, shifts majority control of Dassault Reliance Aerospace Limited (DRAL) to Dassault, bringing its stake to 51%. The transaction not only alters the operational dynamics of the joint venture but also signals deepening international confidence in India’s manufacturing capabilities, especially as the country pursues ambitious “Make in India” initiatives in aerospace.

As global aerospace companies seek to diversify their manufacturing bases and tap into emerging markets, India has become a key strategic destination. The Dassault-Reliance partnership, initially rooted in defense offsets from the Rafale fighter jet deal, has evolved into a flagship example of technology transfer and industrial collaboration. The expanded partnership aims to deliver the first “Made in India” Falcon 2000 business jet by 2028, marking the first time Dassault will manufacture these Private-Jets outside France.

This article analyzes the historical context, transaction details, strategic implications, industry impact, and future prospects surrounding the Dassault-Reliance joint venture. It also examines the regulatory and financial challenges, including recent fraud allegations against Anil Ambani, and explores the broader significance of this development for India’s aerospace ambitions.

Historical Context and the Dassault-Reliance Partnership

The Dassault-Reliance joint venture was established in October 2016, closely following India’s government-to-government agreement with France for 36 Rafale fighter jets. Under India’s defense procurement policy, foreign vendors were required to invest a portion of contract value back into India as offsets, stimulating local industry and technology transfer. In the case of the Rafale deal, this offset obligation was approximately 50% of the €7.87 billion contract value, making it one of the largest in Indian defense history.

DRAL was formed with Reliance Aerostructure Limited, a subsidiary of Reliance Infrastructure, holding 51% and Dassault Aviation holding 49%. The joint venture’s facility was set up in the Mihan SEZ in Nagpur, Maharashtra, strategically chosen for its central location and proximity to aerospace infrastructure. DRAL’s mandate extended beyond defense offsets, with ambitions to manufacture components and eventually assemble complete aircraft for both military and civilian markets.

This partnership represented Dassault’s first major manufacturing venture outside France. For Reliance, it provided access to advanced aerospace technologies and the opportunity to participate in global supply chains. The collaboration aligned with India’s Make in India initiative, aiming to boost domestic Manufacturing and reduce import dependency.

Offset Obligations and Technology Transfer

The Rafale offsets required Dassault and its partners to invest around €4 billion in India, fostering technology transfer and industrial development. This was executed through a network of Indian suppliers and partnerships, with DRAL as the flagship entity. The joint venture’s initial focus was on manufacturing components for the Falcon 2000 business jet, gradually expanding capabilities to more complex assemblies.

Since 2019, DRAL has delivered over 100 major sub-sections for the Falcon 2000, demonstrating growing technical competence. The facility spans 400,000 square feet and is designed to support the assembly of up to 22 Falcon 2000 jets annually. The planned expansion includes final assembly lines for the Falcon 2000, Falcon 6X, and Falcon 8X, positioning India among a select group of countries capable of complete business jet production.

Technology transfer has been central to the partnership, with Indian engineers receiving training in advanced manufacturing, quality control, and certification processes. This not only benefits DRAL but also strengthens India’s broader aerospace ecosystem.

“The Dassault-Reliance partnership is not just about offsets; it’s about building a foundation for India’s aerospace future through technology transfer and skill development.”

Strategic Importance for Dassault and Reliance

For Dassault, the partnership provides a foothold in one of the world’s fastest-growing aerospace markets and diversifies its manufacturing base. Majority control enables Dassault to directly oversee quality standards, customer support, and strategic direction, addressing concerns about operational continuity and after-sales service.

For Reliance, the joint venture offers access to advanced technology and a platform to participate in global aerospace supply chains. It aligns with Reliance Defence’s broader ambitions to invest ₹10,000 crore over the next decade in aerospace and defense manufacturing, including indigenous aircraft development and modernization programs for the Indian armed forces.

The partnership’s success has influenced other international aerospace companies to establish similar collaborations in India, accelerating technology transfer and industrial growth.

Transaction Details and Implications of Majority Control

The recent transaction involved Reliance Infrastructure selling a 2% stake in DRAL to Dassault Aviation for Rs 175.96 crore, based on independent valuation and including a control premium. With this acquisition, Dassault’s stake increased from 49% to 51%, making it the majority owner and shifting operational control.

This change transforms DRAL from a Reliance subsidiary to an associate company, altering its consolidation in Reliance’s financial statements. Dassault now has direct authority over manufacturing processes, strategic decisions, and customer commitments, crucial for maintaining international quality standards and ensuring global customer confidence.

The capital infusion provides liquidity for Reliance Infrastructure, which has faced financial pressures in recent years. For Dassault, the investment represents a strategic commitment to India’s aerospace sector and underscores the importance of the Indian market in its global expansion plans.

Manufacturing Expansion and Future Plans

Under Dassault’s majority control, DRAL is set to become the first facility outside France to manufacture Falcon business jets, with the first “Made in India” Falcon 2000 targeted for Delivery in 2028. The expanded manufacturing agreement includes final assembly of the Falcon 2000, as well as major assemblies for the Falcon 6X and 8X models.

The facility’s capacity and technical capabilities will be upgraded to support these ambitions, with significant investments in infrastructure and workforce development. Indian engineers and technicians will continue to receive training in advanced manufacturing techniques, further enhancing the country’s aerospace skill base.

This manufacturing expansion aligns with India’s Atmanirbhar Bharat (Self-Reliant India) vision and the government’s goal of achieving $26 billion in aerospace and defense manufacturing turnover by 2025.

“By establishing final assembly operations in India, Dassault Aviation positions the country among an elite group of nations capable of producing next-generation business jets.”

Financial Performance and Market Context

Dassault Aviation’s financial strength underpins its expansion in India. In the first half of 2025, Dassault reported consolidated net sales of EUR 2.854 billion and maintained cash reserves of EUR 9.547 billion. The company’s order backlog of 75 Falcon aircraft provides strong visibility for future production.

DRAL’s financial performance has been modest but steady, with a turnover of Rs 69.93 crore and net worth of Rs 47.13 crore in FY2025. While this represents a small fraction of Reliance’s overall operations, the joint venture’s potential for growth is significant as manufacturing scales up.

The Indian aerospace and defense market, valued at $28.68 billion in 2024 and projected to grow at 7.10% annually, provides a favorable environment for DRAL’s expansion. Government initiatives, such as defense industrial corridors and incentives for local manufacturing, further support this growth.

Regulatory Challenges and Corporate Governance

The Dassault-Reliance partnership operates within a complex regulatory environment shaped by defense procurement policies, foreign investment rules, and certification standards. Offset obligations, which initially drove the joint venture, continue to influence its strategic direction. The government has streamlined approval processes and emphasized indigenously designed, developed, and manufactured (IDDM) products, aligning with DRAL’s mission.

However, recent legal and financial challenges facing Anil Ambani and his companies have raised concerns about corporate governance. Indian banks have declared Ambani and associated entities as involved in fraudulent activities related to unpaid dues, and the Central Bureau of Investigation has launched probes into related financial irregularities. Ambani’s representatives maintain that group companies operate independently and deny wrongdoing.

While these issues primarily affect Reliance Communications rather than DRAL directly, they have created reputational risks. Dassault’s majority control and financial strength provide operational stability and insulation from these broader challenges, ensuring continuity in manufacturing and customer commitments.

“The impact of regulatory and legal challenges on DRAL appears limited, given Dassault Aviation’s majority control and direct oversight of operations.”

Strategic Partnerships and Supply Chain Integration

Dassault’s approach in India extends beyond the DRAL joint venture, encompassing a network of Partnerships with Indian suppliers and technology partners. Collaborations with Tata Advanced Systems and Thales Reliance Defence Systems, among others, have diversified the supply chain and facilitated technology transfer across the industry.

This ecosystem approach ensures that benefits from technology transfer and skill development are distributed throughout India’s aerospace sector. Indian engineers trained in European standards contribute to other projects, strengthening the country’s position as a credible destination for advanced manufacturing.

The partnership’s success has set a precedent for other global aerospace companies, such as Boeing, Lockheed Martin, and Airbus, to pursue similar collaborations in India, further accelerating the country’s emergence as an aerospace manufacturing hub.

Conclusion

Dassault Aviation’s acquisition of majority control in its joint venture with Reliance marks a significant milestone in India’s journey toward becoming a global aerospace manufacturing powerhouse. The transaction reflects international confidence in India’s capabilities and provides the operational framework for delivering world-class business jets from Indian soil by 2028.

While challenges remain, particularly regarding regulatory complexities and the financial health of Reliance’s broader business empire, the partnership’s robust foundations, strong financial backing, and strategic alignment with government initiatives position it for long-term success. The outcome of this collaboration will influence not only the future of Dassault and Reliance but also the trajectory of India’s aerospace industry and its role in the global market.

FAQ

Q: What is the significance of Dassault Aviation acquiring a majority stake in DRAL?
A: Majority control allows Dassault to directly oversee manufacturing quality, strategic decisions, and customer commitments, ensuring global standards and operational continuity.

Q: What are the main products to be manufactured at the DRAL facility?
A: The facility will manufacture major assemblies and, eventually, complete Falcon 2000 business jets, with plans to expand to Falcon 6X and 8X models by 2028.

Q: How does the partnership align with India’s Make in India initiative?
A: The joint venture supports Make in India by transferring advanced aerospace technology, building local manufacturing capabilities, and creating skilled jobs, contributing to India’s goal of becoming self-reliant in aerospace.

Q: What are the challenges facing the Dassault-Reliance partnership?
A: Challenges include regulatory complexities, certification requirements, and reputational risks from financial and legal issues affecting Anil Ambani’s broader business interests. Dassault’s majority control mitigates operational risks for DRAL.

Q: What is the outlook for India’s aerospace industry?
A: The industry is poised for growth, with government support, a rising domestic market, and increasing international investment driving expansion in both defense and civilian aerospace manufacturing.

Sources

• Reuters
• Economic Times
• IDRW
• Dassault Aviation