New Delhi, Nov 17 (IANS): Indian transport vehicles major Mahindra and Mahindra Thursday announced a joint venture with US aviation communications equipment major Telephonics Corporation to produce radars, surveillance systems, and communications solutions for the Indian defence ministry and civilian sector.
The JV was announced at a press conference here by Mahindra Defence Systems chief executive Brig. (retd.) Khutub Hai and Telephonics Corporation CEO and president Joseph Battaglia.
Hai said the US firm will bring in 26 per cent investment for the JV, while his company will bring the rest 74 per cent.
"We will be filing our application for the JV with the Foreign Investment Promotion Board (FIPB) by the end of this month and we expect the approvals in the next two or three months. By April 1, 2012, we should be setting up the JV," he said.
India has fixed a cap of 26 percent foreign direct investment for the defence industries in India and there have been demand from the private sector that it should be increased to at least 49 percent.
The JV is looking for land to set up a manufacturing plant and has identified three places for the same, which would be finalised before the JV is formed.
Apart from the radars, surveillance systems, and friend or foe identification system for military purposes, the JV will also manufacture air traffic management services, homeland security and other emerging surveillance requirements.
"The project envisages establishing a plant in India, which would manufacture and service airborne radar systems that are already being supplied to the Hindustan Aeronautics Limited (HAL) and to support airborne maritime surveillance systems for the Indian Navy and Coast Guard," Hai said.
"The JV will license technology from Telephonics for use on a wide range of products that have both defence and civil applications," he added.
Asked if the JV was coming up in view of some defence tenders in this regard, Hai said: "I don't think we are setting up this JV in an opportunistic manner or not because there is a defence request for proposals."
However, he agreed that there was plenty of opportunities in this field in India, and with the US-India relations growing, the JV between the Indian and US companies was "a natural phenomenon".
"Yes, we do plan to hit the ground running with some opportunities that we are looking at," he added.
On the JV's competitors in India, Battaglia said: "We don't think we have any competition."
Hai added that his was the first private sector company to enter into a JV for high-end products in this field, though Indian public sector undertaking Bharat Electronics Limited (BEL) was a competition in some areas. "In some other areas, we will work together with BEL," he said.
Telephonics is already supplying its products to Bangalore-based HAL, and is looking at how its air traffic management products could be improved.
To a question on US Congressional approval for sharing high-end technology to Indian companies, Battaglia said except for a couple of Telephonics' products, all others are supplied to countries around the world by the firm.
"With India-US relations growing at a rapid pace, I do not see any challenge in this area to supply even those restricted products to India and approvals won't be a problem," a Telephonics executive said.
Whether India not signing the Communications Interoperability and Security Memorandum of Agreement (CISMOA), a mandatory US law for export of high-end communication equipment for military purposes, Telephonics officials said their products would not attract the law, as these were meant for on-board communication within the aircraft.