In a major boost to Prime Minister Narendra Modi’s Make in India initiative, Reliance Defence is set to enter into an agreement with Russian United Shipbuilding Company (USC) to build four frigates for the Indian Navy.
An agreement to this effect is likely to be signed during Modi’s visit to Moscow on Thursday, a Reliance Defence source said. It will be the first time that a major warship will be built at a private sector shipyard in India.
These four front-line warships will be built at a cost of nearly Rs 30,000 crore at the Pipavav shipyard in Gujarat, a Reliance Defence official said.
The agreement between Reliance Defence and USC also includes a partnership for refit and modernisation of all Indian Navy surface ships of Russian and Soviet origin at Reliance’s Pipavav shipyard in India.
Reliance Defence is a wholly owned subsidiary of Reliance Infrastructure led by Anil Ambani, who is part of the prime minister’s delegation visiting Russia.
While public sector shipyards have been involved in building warships, this will be the first time that a private entity will venture into the area.
Currently, there are 35 Russian/Soviet-origin surface ships in the Indian Navy fleet. The value of this business is estimated to be over Rs 35,000 crore.
If the agreement is signed, it will be the first of its kind between a Russian defence OEM (original equipment manufacturer) and an Indian private sector company.
The combined value of two agreements could exceed Rs 66,000 crore over the next 10 years, sources said.
Reliance Infrastructure had recently acquired an additional 17% stake in Pipavav Defence for an estimated Rs 850 crore, taking its total holding to nearly 35%.