RIL, Raytheon may form homeland security JV

NEW DELHI: Reliance Industries, India's most valued company, is in "advanced talks" with American defence giant Raytheon to create a joint venture that will pursue opportunities in homeland security in India and abroad.

"RIL and Raytheon are in talks (to set up a joint venture in homeland security business) that are in the late stage," said a person involved in the talks, asking not to be named.

A joint venture with Raytheon - maker of the famous Patriot missiles used in the first Iraq War and a strategic partner of the US government on key homeland security programmes - will give Reliance access to high-end security products and engineering solutions.

"This joint venture will give RIL the ability to innovate and develop key technologies for India," said a Delhi-based analyst who didn't wish to be identified because he is not authorised to speak to the media.

For Raytheon, which is present in the country through partnerships with several companies including the Tata Group, Larsen & Toubro and Bharat Electronics, the proposed venture will mean easier access to one of the fastest-growing markets for homeland security solutions.

The $8-billion Indian homeland security industry is expected to grow to $14 billion in the next three years and to $16 billion by 2016. Defence analysts say that such a joint venture could help end the so-called "India fatigue" that has set in among American companies after failing to make it to the shortlist of the country's biggest military contract, worth 42,000 crore, to acquire 126 medium multi-role combat aircraft for the Indian Air Force.

Responding to an email query from ET, a Raytheon spokesperson said, "We do not comment on rumour or speculation."

As of now, it has a joint venture with only one firm - France's Thales.

Reliance Industries' homeland security and aerospace division head Vivek Lall too did not respond to repeated e-mails about talks with Raytheon.

The Mukesh Ambani-owned company is also in talks with German firm Siemens AG to form a joint venture in homeland security, the person involved in the talks said. A few months ago, RIL had tied up with Siemens to jointly bid for security projects.

The two companies jointly bid for a 600-crore Mumbai CCTV project, which was conceived after the 26/11 attack and envisages setting up computerised video surveillance at 100 critical traffic junctions in the metropolis. The Maharashtra government has shortlisted the combine for the project.

Indian companies such as Tata Group, Larsen & Toubro and Mahindra Group have already tied up with foreign players in the homeland security space.

Mahindra Defence Systems has a joint-venture partnership with US-based Telephonics Corporation to make radars and surveillance and communication systems for the Indian military, while Tata Advanced Systems has a venture with Zurich-based AGT International to tap opportunities in the homeland security market. RIL set up its homeland security and aerospace division early this year after roping in Lall, 42, a former NASA scientist who steered Boeing's military and commercial division in India for years.

Lall worked with Raytheon in the 1990s and was part of the engineering team that developed its aircraft for the Joint Primary Aircraft Training System (JPATS), an ambitious aircraft procurement programme in the US in 1995.

Ever since the Indian Parliament was attacked in 2001, security experts have called for enlisting the private sector to step up security across the country, especially in cities.

Currently, one of the best "safe-city" communications systems in the country is in Parliament. Installed by Cassidian, the security division of the Netherlands-based EADS, the Tetra radio network doesn't get jammed even in disaster situations.