Visakhapatnam: Anil Ambani-led Reliance Group has signed a pact with the Andhra Pradesh government to set up a new defence manufacturing facility in the state for an initial investment of ₹ 5,000 crore.
The deal represents “the single-largest investment at any one location in the state of Andhra Pradesh," Ambani said during the inaugural ceremony of the CII Partnership Summit at Vishakhapatnam on Sunday evening.
The facility will be set up in Rambilli, south of Visakhapatnam, and highlights the group’s desire to chase high-growth opportunities in the defence sector.
Ambani said it is estimated that the Indian Navy will spend over ₹ 3 trillion ₹ 20,000 crore per year, on acquisitions and fleet modernisation of submarines and aircraft carriers, over the next 15 years, creating a huge pipeline of opportunity for the proposed world class naval facility.
“Vizag is very well suited for manufacturing nuclear submarines and aircraft carriers," Ambani told delegates and the media at the summit that was inaugurated by Union finance minister Arun Jaitley.
The summit is expected to be attended by close to 1,600 delegates, including from China and the US. Ambani said the new unit will concentrate on building key assets for the Indian Navy and complement the group’s existing facility at Pipavav in Gujarat.
“Vizag is ideally suited for the manufacture of strategic assets such as nuclear sub-marines and aircraft carriers, critical areas of naval defence capability where we need to catch up with the rest of the world," Ambani said.
He said the US has 10 aircraft-carrier groups operating around the world to project its power and protect its interests and is on course to adding another three, while India has only one.
“Similarly, while the US has 72 submarines and China 69, India has a small fleet of 17 submarines," Ambani said.
Ambani said the initial investment outlay of ₹ 5,000 crore in Vizag will represent the single largest investment at one location anywhere in Andhra Pradesh.
Reliance Infrastructure Ltd, a unit of Reliance Group, has acquired a majority stake in Pipavav Defence through an open offer.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay High court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.