The Foreign Investment Promotion Board (FIPB) will decide on September 30 whether foreign direct investment (FDI) caps to the tune of 49 per cent should be permitted in defence in some cases. At present, FDI in defence is capped at 26 per cent.
An application from Mahindra and Mahindra (M&M) for a joint venture with British Aerospace Systems for land systems will be heard on Tuesday by the FIPB. BaE Systems is looking at picking up 49 per cent equity in a joint venture with M&M for an anti-landmine vehicle. What has given additional traction to the proposal is Defence Minister AK Antony’s statement that FDI caps in defence could be raised on a case-to-case basis.
BaE Systems and M&M had signed a memorandum of understanding to manufacture the RG-31 landmine-protected vehicle in February following a discussion on its possible production. As many as 600 of these vehicles are in use with the United States, Canada and the United Nations.
The British defence group has been supplying 165 armoured vehicles, known as Casspir, to the Indian Army since 1999.
“Mahindra is an enormously capable world-class company with the skills to become a strong partner for BAE Systems on the development of a mine-protected vehicles for India,” said Julian Scopes, president (India operations), BAE Systems.