Competition Commission today approved the proposed joint venture between Anil Ambani-led group firm Reliance Aerostructure and Rafale-maker Dassault Aviation, one of the major deals in India's private defence industry.
The combination relates to the setting up of a joint venture between Reliance Aero and Dassault -- Dassault Reliance Aerospace Ltd, in which Reliance Aero would hold 51 per cent shares, with the remaining 49 per cent to be held by Dassault.
Fair trade regulator CCI said in a tweet that it has approved setting up of this JV. Deals beyond a certain threshold require approval from Competition Commission of India (CCI), which keeps a tab on unfair business practices across sectors.
The JV, which was announced by the two companies in October last year, aims to be a "key player" in execution of offset contract worth about Rs 22,000 crore as part of the multi-billion euro Rafale fighter jet deal between India and France.
The strategic partnership between Dassault and Reliance will also focus on promoting research and development projects under the IDDM programme (Indigenously Designed, Developed and Manufactured), a key initiative of Defence Minister Manohar Parrikar.
The deal is the largest FDI in the defence sector till date and expected to be more than ten times the total FDI received by the entire sector in last 10 years.
According to Reliance Group officials, the deal would see an Indian company having a majority stake in high technology domain and help boost capability as well as skill creation in the private aerospace sector.
This will also have a spillover effect, with creation of large support ecosystem, involving 300-400 small and medium scale Indian companies, they added.
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