New Delhi: Indian vehicle manufacturer
Mahindra & Mahindra and British defence company BAE Systems
on Monday singed an agreement to launch a joint venture company
to focus on manufacturing land systems for security forces.
The proposal, approved by the Foreign Investment
Promotion Board (FIPB) earlier this year, would have an
initial investment of USD 21.25 million (around Rs 100 crore)
over three years, a release from the two companies said here.
The JV`s equity would be split into 74 per cent in
favour of the domestic company and 26 per cent in favour of
the foreign investor, as per the Foreign Direct Investment
(FDI) regulation for the defence sector.
To be headquartered here, the JV company, whose name
is currently going through official certification process,
would have a purpose-built manufacturing facility at Faridabad
Initially, the JV would have 100 employees and existing
projects would include the Axe high mobility vehicle, as well
as up-armoured and bulletproof Scorpios, Boleros, Rakshak,
Rapid Intervention Vehicles and Marksman light armoured
vehicles, the release said.
In anticipation of the new JV, the two companies have
been progressing a new project to develop mine protected
vehicle specifically designed to meet the needs of the Indian
armed forces, it added.
"This development process has resulted in a brand new
mine protected vehicle currently named MPVI (Mine Protected
Vehicle India). A prototype of MPVI has been produced and will
eventually be manufactured at the JV facility in Faridabad
using indigenously produced materials," it added.
The JV also intends to involve a number of future
artillery programmes including the M777 light weight howitzer
and the FH77B 155mm howitzers.
Mahindra Group Vice-Chairman and Managing Director
Anand Mahindra said his company was already working with BAE
systems and it benefited all parties, including the Indian
armed and paramilitary forces.
BAE Systems` Group Managing Director International Guy
Griffiths said Mahindra was an important choice to be his
company`s partner in India for the land systems.