Reliance Group gets land in Nagpur for aerospace park

Maharashtra allots 289 acres to Anil Ambani-controlled group to build aerospace park that will consist of assembly lines, manufacturing facilities

Mumbai: The Maharashtra government has allotted 289 acres of land in Nagpur to Anil Ambani-controlled Reliance Group to build an aerospace park that will consist of assembly lines and manufacturing facilities for fixed-wing aircraft, aerostructure for commercial transport planes and helicopters for both military and commercial use.

The Dhirubhai Ambani Aerospace Park (DAAP), named after the late patriarch of the Ambani family, will come up at a cost of 6,500 crore.

“We started on 16 June 2015 with the first presentation and in less than 10 weeks we got the land. This is a record," said Anil Ambani, chairman of Reliance Group. “Prime Minister Narendra Modi is steering the Make in India campaign, which is encouraging private sector participation. We are deeply committed to the defence sector.".

The land has been allotted to Reliance Aerostructure Ltd, the defence arm of the Reliance Group, according to a government official and a senior company executive who spoke on condition of anonymity. The land allotment letter was handed over to the company on Friday at a ceremony in Nagpur.

According to Reliance Group executives, the DAAP will also develop a cluster of strategic business units with tier I, II and III supply chain and other sub-assembly lines, along with ancillary and component manufacturing units to support after-sales requirements.

The executives, who spoke on condition of anonymity, said global original equipment manufacturers (OEMs) in defence and aerospace platforms and components will set up shop in DAAP.

In June, the Reliance Group applied to the department of industrial policy and promotion (DIPP) for licences to make defence and aerospace products.

Group companies that applied for licenses on 17 June were Reliance SED Ltd, Reliance Naval Systems Ltd, Reliance Unmanned Systems Ltd and Reliance Aerostructure Ltd, according to the DIPP website.

These companies want licences to manufacture, among other things, scientific investigation ships, parts and accessories of aircraft and spacecraft, engines, turbines and radar equipment.

Other companies that applied for these licences include Reliance Helicopters Ltd, Reliance Propulsion System Ltd, Reliance Aerostructure Ltd, Reliance Land Systems Ltd and Reliance Technologies Pvt. Ltd.

India will see a total defence budget allocation of $620 billion between fiscal 2014 and 2022, of which 50% will be on capital expenditure, according to a February report by industry lobby Federation of Indian Chambers of Commerce and Industry and financial services company Centrum Capital Ltd.

The annual opportunity for Indian companies—both state-owned and private—is expected to touch $41 billion by fiscal year 2022 and $168 billion cumulatively, it said.

The Reliance Group and the Adani Group are the latest to enter the defence market. Adani Group’s unit has already filed an application to make helicopters.

Bharat Forge Ltd, Reliance Industries Ltd, the Tata Group, Larsen and Toubro Ltd, the Godrej Group and the Mahindra Group are fairly well entrenched in the business and are looking for more opportunities.

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.

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