The Foreign Investment Promotion Board (FIPB) is understood to have approved a proposal from Japanese auto component maker ShinMaywa Industries Ltd to form a joint venture with Pune-based firm Kailash Vahan Udyog Ltd.
Highly placed sources said the FIPB has cleared the proposal at its meeting held recently and has recommended for a final approval by the Finance Ministry.
ShinMaywa Industries had sought permission to form a JV with the Indian firm to design, manufacture, sale and provide after sales service of the Japanese firm's special purpose truck products, like tippers and garbage compactors.
Through the proposed JV — Kailash ShinMaywa Ltd (KSL) — ShinMaywa Industries plans to set up a manufacturing facility to expand its presence in the country.
The Tokyo Stock Exchange and Osaka Securities Exchange listed company sought permission from the Indian government to hold 60 per cent stake in KSL, which would result in an inflow of Rs 1.2 crore. The proposed authorised share capital of KSL is Rs 20 crore, while the paid equity share capital would be Rs 5 lakh, sources said.
ShinMaywa Industries has granted exclusive licence to Mumbai-based ACC Machinery Company Ltd (AMCL) to produce, use and sell truck mixer models in India, Nepal, Bangladesh and Bhutan and a non-exclusive licence for the same products for Sri Lanka and Pakistan.