Engineering conglomerate Larsen and Toubro's (L&T) sale of its electrical and automation (E&A) division to the French multinational Schneider Electric will spur growth in domestic manufacturing, Commerce Minister Suresh Prabhu said on Wednesday.
A Commerce Ministry release said that during a meeting here with Schneider Electric Chairman Jean Pascal Tricoire, Prabhu said this project, by combining with the French company's digital know-how, will result in greater domestic production, increased exports, reduced imports and offer a wide range of products at competitive prices.
In May, L&T signed a deal with Schneider Electric to sell its E&A business to the latter for Rs 14,000 crore ($2.1 billion). According to L&T, the transaction would be an all-cash deal, without recourse to loans.
"Prabhu further stated that the project will be one of the largest ever investments in manufacturing sector by a French company in the country and will contribute to both the 'Invest in India' and 'Make in India' initiatives," the Ministry statement said.
"With the project, India will become the third largest country of operation for Schneider Electric at par with France."
According to L&T, its E&A business includes low and medium voltage switchgear, electrical systems, marine switchgear, industrial and building automation solutions, energy management systems and metering solutions.
However, the transaction does not include marine switchgear and Servowatch Systems.
The company's E&A business reported a net revenue of Rs 5,038 crore during the financial year 2016-17.
--IANS
bc/mr
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