Article Posted on : - Dec 01, 2009

The two companies join hands to cater to the needs of Indian armed forces.

NEW DELHI (PTI): Indian vehicle manufacturer Mahindra & Mahindra and British defence company BAE Systems have signed 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 $ 21.25 million (around Rs 100 crore) over three years, a release from the two companies here said on Monday.

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 near Delhi.

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.

In anticipation of the new JV, the two companies have been working on a new project to develop mine protected vehicle specifically designed to meet the needs of the Indian armed forces, the statement said.

“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.