L&T, Europe’s MBDA in Pact for De­fence JV

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

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.

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