UK-based Euro 1-billion Caparo group has recently made a formal request with the Andhra Pradesh government for allotment of about 1,500 acres of land to set up auto and aerospace component manufacturing units in Nellore district.Confirming the development, a senior government official who has been involved with recent interactions with the Caparo officials, said the group's plan for establishing component manufacturing units in India was primarily driven by the offset clause, which is being introduced for all major defence contracts awarded to overseas companies by the Centre.As per the clause, for each contract worth Rs 300 crore and above, the overseas companies have to source supplies to the extent of 30% of the contract value from India. In the case of multi-combat role aircraft, for which request for proposals were issued to six companies recently, it is as high as 50%.According to state government official, Caparo is planning to invest up to Rs 4,000 crore in the project along with facilitating other component manufacturers to set up shops here.The officials have been in touch with the company ever since Caparo indicated it plans to expand its component manufacturing base in India.This proposal also figured at an informal meeting between chief minister YS Rajasekhara Reddy and Caparo's founder and chairman Swraj Paul in Delhi a couple of months back, according to sources.The state industries department is currently processing the application for land and other facilities sought by the company, official said.
