Is MMRCA Delay Holding Up The BEL- Thales Joint Venture?

India’s government-owned defence electronics manufacturer, BEL has announced that its joint-venture with Thales to develop radars has been approved by the Indian Foreign Investment Promotion Board (FIPB) but is still awaiting approval from the government. Speculation is rife that the JV with Thales has got delayed due to a delay in the MMRCA deal  between the Indian MOD and Dassault.

The joint venture will focus on designing, developing and manufacturing civilian and select military radars for both the Indian and global markets. Thales manufactures the all-important AESA radar for the Dassault Rafale fighter.

Earlier in January, in an interview with Defenseworld.net, BEL’s Chairman and Managing Director Anil Kumar said that his company was in talks with Dassault Aviation and its Tier 1 suppliers like ECE, Inter Technique & Thales over the execution of the Rafale contract. 

Of the 126 fighters, more than three fourths will be license-manufactured in India where BEL’s role as the leading defence electronics systems manufacturer in India will come into play. Significantly, it is likely to indigenize the airborne electronically scanned array (AESA) radar, advanced EW systems and avionics.

“BEL is interested in Airborne Radar, Electronic Warfare Systems (EW) and Avionics. We know that these are very specific areas for which BEL is perhaps the best qualified company in India. We have been visited by these companies and their major partners,” he said.

Thales will hold 26 per cent stake in the company, as per the Defence foreign direct investment (FDI) norms that India prescribes at present.

BEL, as expected, will hold the rest 74 per cent stake, which is touted to be around $10 million.

In February, Chief of the Indian Air Force Air Chief Marshal NAK Browne addressed the issues surrounding the MMRCA deal which has been plagued by several delays since Dassault was awarded the contract last year.

"The MMRCA is very much on track. The Contract Negotiation Committee process is currently on. I expect contract negotiations to be complete by May this year. We should be in a position to sign the contract by the end of the year," Air Chief Marshal Norman Browne said.

However, even on the last day of May, there is still no news whether the contract with Dassault for the MMRCA is anywhere near completion.