Germany’s Rheinmetall and India’s Reliance strike ‘strategic’ ammunition agreement

A technician of German armaments company and automotive supplier Rheinmetall works on 155mm ammunition at the facility of Rheinmetall in Unterluess, northern Germany, on June 6, 2023. (Photo by AXEL HEIMKEN/AFP via Getty Images)

BELFAST — German defense firm Rheinmetall and India’s Reliance Defence announced a “strategic partnership” on ammunition supplies today after officials from both companies signed a Memorandum of Understanding (MoU).

“The collaboration between the companies will include supply of explosives and propellants for medium and large caliber ammunition to Rheinmetall by Reliance,” said the European manufacturer in a statement. “Furthermore the two companies intend to engage in joint marketing activities for selected products and are aiming to further extend their cooperation based on future opportunities.”

Key to the collaboration is a plan for Reliance to establish a “greenfield manufacturing facility” based in the Watad Industrial Area of Ratnagiri, a city on the west coast of Maharashtra, India.

The future production base will become “one of the largest in South Asia” and hold the capacity to manufacture “up to 200,000 artillery shells, 10,000 tons of explosives and 2,000 tons of propellants,” annually.

Rheinmetall did not disclose a timeframe for the facility to open or start production but noted the site “will make a significant contribution to supplying” India’s armed forces, while playing “an important role in realizing the Indian government’s vision of achieving defence exports” in the region of $5 billion.

The new partnership also gives Rheinmetall “further access to important raw materials and secures not only its supply chains, also in the interests of its customers, but also creates further growth opportunities,” the company explained.

Anil Ambani, founder of the Reliance Group, labelled the collaboration with Rheinmetall as a “transformational moment for the Indian Defence sector.”

The move also builds off Reliance’s recently stated plans to establish “an integrated project” based on the production of explosives, ammunition and small arms, aligned to the Dhirubhai Ambani Defence City (DADC).

As shared by Rheinmetall, “The DADC is being built in the Watad industrial area in Ratnagiri, Maharashtra, and once completed will be the largest greenfield project in the defence sector ever developed by any private company in India.”

Based off a Reliance exchange filing last year, Reuters reported that the manufacturer plans on potentially developing joint ventures with six international defense firms, to support the DADC effort. Reliance is already tied to two joint ventures with France’s Thales, related to radars and electronic warfare equipment, as well as Dassault, which includes the supply of parts for Rafale fighter jets.

Elsewhere, Rheinmetall also announced today that it had signed a separate “strategic agreement” with Spain’s Indra for armored vehicles. The collaboration, underwritten by another MoU, specifically focuses on “armoured vehicles projects of the Spanish Armed Forces,” according to a statement.