Known for taking some ambitious bets over the past decade, some of which have failed to deliver, Ambani’s plans to turn Reliance into a major defence company may be one of his boldest yet. 

It has already bid for 840 billion Indian rupees ($12.5 billion) in government contracts, senior executives said, though it hasn’t yet won any of those.

The success of the strategy will depend on two things primarily:

• 1.) Whether he can persuade government officials and international partners that he can build sophisticated equipment 
• 2.) Whether Prime Minister Narendra Modi can get India’s notoriously slow procurement process to work.

Modi has made defence a big part of his “Make in India” programme. As part of any defence contract, he is demanding foreign companies tie up with a local partner, transfer technology and move some manufacturing to India.

Anil Ambani eyeing $250 billion defence projects

At stake is $250 billion in defence contracts the government is expected to award over the next 10 years as it looks to upgrade the military’s aging equipment. “We hope to have a significant share of this pie,” said R K Dhingra, chief executive of Reliance Defence. He predicted the company will “emerge as a key player in the defence sector over the next few years.”

Many are skeptical about Reliance’s plans

Reliance’s ambition is greeted with skepticism by many in the defence world. An military official involved in defence procurement said Reliance is overreaching in wanting to make everything from ships to planes. 

Some rivals and potential partners for the contracts said Reliance will struggle to master the manufacture of such a wide range of sophisticated military hardware.

“There is no quick money in this branch,” said Jan Widerstrom, head of Saab India Technologies, a unit of Saab AB. “It requires a lot of experience, high tech culture, investments and a long-term business plan.”

Still, Saab and Reliance are working together in developing the next generation Combat Management System for the Indian Navy and Coast Guard.

Their lack of experience cost them in the past

Recently, Reliance’s lack of experience and questions about its ability to handle sensitive technology and intellectual property counted against it in its bid to partner with the Russians to build 200 Kamov helicopters, said a Russian diplomat in New Delhi, who declined to be identified in this story because they weren’t speaking in an official capacity.

Ambani should identify core areas and concentrate on them rather than “be an inch deep and a mile wide,” said Nitin Gokhale, founder of defence website Bharat Shakti.

(Feature image source: Reuters)