In a recent development, Reliance Defence, a subsidiary of Reliance Infrastructure, has entered into a strategic cooperation agreement with Germany’s Diehl Defence that has the potential to reshape India’s defence production landscape.
Reliance and Diehl Sign ₹10,000 Crore Defence Deal
This partnership is mainly focused on the local production of the Vulcano 155mm precision-guided munition system which is an advanced artillery shell designed for long-range, high-accuracy strikes.
They made this announcement on 10 June signaling a major step forward in India’s efforts to reduce dependence on imported defence equipment while building a robust domestic manufacturing base.
The Vulcano 155mm system, which would be made in India, is no ordinary shell.
The system will use cutting-edge laser and GPS-guided targeting to deliver pinpoint accuracy, hence making it a valuable asset for the Indian Armed Forces.
This is especially useful in modern combat scenarios where precision is critical.
Huge Opportunity For Reliance Defence
Reliance Defence will lead the manufacturing of this project and will be putting effort as the prime contractor, while Diehl Defence will provide the core technology and system-level expertise.
For the production, they will have a new greenfield facility in the Watad Industrial Area, Ratnagiri, Maharashtra, which will be part of the Dhirubhai Ambani Defence City (DADC).
According to the Reliance Defence, they have estimated this partnership could generate up to ₹10,000 crore in revenue.
Besides this, the projection reflects the growing demand for advanced ammunition systems and the company’s ability to localise critical defence technologies.
With this manufacturing initiative, it will include over 50% indigenous value addition that would be directly supporting India’s defence indigenisation goals.
In addition to this it also aligns with the government’s target of achieving ₹50,000 crore in defence exports by 2029.
“Diehl Defence looks forward to strengthening the current relationship with Reliance Group in the context of TGM for the Indian Armed Forces,” said Helmut Rauch, CEO of Diehl Defence.
This collaboration is quite significant for Reliance Group as this is the fourth major international defence partnership, following earlier ventures with Dassault Aviation, Thales Group, and Rheinmetall.
The shares of Reliance Infrastructure rose by 3.5%, closing at ₹404.40 on the Bombay Stock Exchange following the announcement.
It simply demonstrates investor confidence in the long-term value of this strategic move.
