Dassault Reliance Aerospace Limited (DRAL), which has a facility in Nagpur, is a joint venture between the French aircraft giant Dassault aircraft and Anil Ambani’s Reliance Defence.

Since future growth of the factory has been put on hold due to the inability to inject further money into the project, it has been reported by industry sources who are aware of the situation that the French company has already started talks with Reliance Defence about purchasing the interest.

Reliance Defence holds a 51 percent share in the joint venture, while the French company owns a 49 percent stake.

On October 3, 2016, just two weeks after India agreed to purchase 36 Rafale jets in flyaway condition for 7.878 billion euros, Dassault and Reliance announced their joint venture and the establishment of DRAL.

The joint venture’s initial strategy called for hiring and preparing 650 staff members by 2022, with the ultimate goal being the launch of a fully functional Falcon business aircraft from Nagpur. The plans, however, are in turmoil as a result of the financial difficulties Anil Ambani is having.

According to sources, Dassault Aviation is hopeful for clearances because India authorises 100 percent foreign direct investment (FDI) on a case-by-case basis. While Dassault Aviation was previously looking for a potential partner in India, it has reportedly chosen to do it alone.

The production of parts for the Rafale aircraft, like as engine doors and canopies, was taking place at the DRAL factory in Nagpur’s MIHAN Special Economic Zone, but sources say that activity has slowed down.

The factory was built with the intention of producing parts for Falcon planes, not Rafale jets. However, Dassault Aviation is anticipated to begin producing Rafale fighter jet parts at its India factory in June 2019, with the products going to customers around the world.

The facility was created as a result of the offset requirements in the 2016 Rafale agreement, which mandated that 50% of the contract’s value be invested in India.

If Dassault Aviation wins the contract to construct 114 aircraft for the Indian Air Force, sources claim that the company would also prefer to establish a Rafale manufacturing site in India.

IAF operates 36 Rafale aircraft, but due to a shortage of fighters, it is also considering releasing a competition for 114 additional aircraft.

The Indian Air Force (IAF), which has a sanctioned strength of 42 Squadrons but currently only has 31, including those of the old MiG 21s and Jaguar in addition to the MiG-29 — all of which will be decommissioned by 2029–2030 — purchased the 36 in an emergency to stop the sharp decrease in numbers.

The government has made the decision to purchase 26 Rafale M naval variants. Although it includes more ‘Make in India’ components than the IAF one, all of which will be produced at the Nagpur facility, the numbers are too modest for any more extensive indigenous development programme.