Reliance Defence eyes India's ₹20,000-cr defence MRO mkt with new JV

Reliance Defence Ltd on Monday signed a pact with US-based defence contractor Coastal Mechanics Inc. (CMI), as the Anil Ambani-promoted company eyes India's ₹20,000-crore defence maintenance, repair, overhaul (MRO) and upgrade market.

Reliance Defence is a 100% subsidiary of Reliance Infrastructure Ltd.

According to the agreement, Reliance Defence and CMI will set up a joint venture (JV) unit at Mihan in Maharashtra to provide MRO, upgrade and modernization services for air and land defence platforms used by the Indian armed forces.

The JV will look to modernize and upgrade over 100 Jaguar, 100 MiG-29 fighter aircraft, 20 Apache attack helicopters and L-70 air defence guns.

Reliance Defence is also targeting to become one of India's top three defence exporters. “The segment represents a high-value, long-duration opportunity driven by the Indian military’s strategic shift from asset replacement to lifecycle extension and performance-based logistics,” the company in a statement.

Market analyst Ajay Bagga said that rising geopolitical risks will bolster defence expenditure globally, creating export opportunities for India's defence manufacturers and service providers.

“From Asia to Europe there is a surge in defence expenditure in the light of increasing geopolitical risks. Indian defence majors, both in the public and private space, will benefit from both domestic rollouts and export opportunities,” said Bagga.

“We are expecting Indian defence sector to see accelerated expenditure as the armed forces seek to build inventories and to plug gaps in weaponry and systemic capacities in the light of Operation Sindoor. We expect multi-year increases in Indian defence outlays.”

Vinit Bolinjkar, head of equity research at Ventura Securities, sees the announcement of the JV as a positive step. “India is a cost-efficient market and hence attractive for MRO. Given the tie up with Coastal Mechanics which is an authorised contractor will enable Reliance Defence to source business from the US Department of Defence, which is the largest defence spender in the world,” said Bolinjkar.

Major General KK Sinha, Kargil War veteran and defence expert, told Mint that he is confident about India's defence manufacturing capabilities. “While it is important to be self-reliant, we also need to have modernized equipment to match the generational leap. India is bound to emerge in the the global defence manufacturing industry,” he said.

He also said that India's export market can capture the needs of NATO nations as the defence budget targets are reset.

In FY25, India's defence production reached an all-time high, rising 15% to ₹1.46 trillion. The country's defence exports also rose to a record ₹24,000 crore.