L&T, Europe’s MBDA in Pact for Defence JV
New Delhi: Infrastructure major Larsen & Toubro has entered into a joint venture (JV) with European arms manufacturing group MBDA to supply missiles and missile systems to the Indian armed forces.
L&T, which will hold 51% stake in the joint venture, ‘L&T MBDA Missile Systems’, aims to double revenue to 2 lakh crore by 2021 and has identified defence as one of the key drivers for achieving this growth. It has been building its capability on its own and has also formed joint ventures to acquire technology and eligibility.
“We are very committed to India’s core nuclear and defence sector. We will work with our partner and make the joint venture a major success in the Indian missile programme,” said AM Naik, group executive chairman of L&T. L&T did not disclose the financial details of the agreement. The JV aims to tap opportunity ari- sing from the government’s ‘Make in India’ initiative.
India allows foreign companies to own100% equity in the defence sector through the government approval route, while they can own 49% through the automatic approval route.
The joint venture will be registered in India and will be subject to Indian laws. The partners are exploring two locations for setting up of an operation centre in the country.
Naik said about 500 highly skilled people will be employed by L&T in India to work on these sophisticated missile systems. These employees could be sent to Europe for further training and skill development. Initially, the joint venture will focus on developing and supplying fifth-generation anti-tank guided missiles (ATGM5s), missiles for coastal batteries & high-speed target drones.
The JV has identified coastal defence as a key priority sector.