In a bid to become a major Indian electronics house for defence and security, Cassidian, the defence and security division of Europe's leading aerospace and defence group – EADS, has forged a long term partnership with Indian engineering giant, Larsen & Toubro (L&T).
The Indian authorities have now approved the formation of a joint venture company between L&T and Cassidian, the companies said.
The joint venture will be active in the defence electronics market and will cooperate closely with Cassidian's new engineering centre in Bengaluru where systems design and engineering activities will be carried out in the fields of electronic warfare, radars and avionics for military application.
“The coming together of L&T with Cassidian is a major milestone in the area of defence electronics. It will not only serve the Indian armed forces with state-of-the art technology, but also provide a platform for making significant contributions to the global market in high-technology defence equipment,” M V Kotwal, Member of the Board, L&T and President Heavy Engineering said.
L&T will hold 74 percent in the joint venture whereas Cassidian's share will be at 26 percent. Recently, while opening India’s first foreign-owned, defence engineering center in Bengaluru, Cassidian expressed problems the deal faced initially because of the central government’s rule of 26% cap on foreign direct investment (FDI) into defence sector.
“There are some limitations. We respect the government rules and so are abiding by it, we have a 26% share in the JV,” Dr. Stefan Zoller, Cassidian CEO, told media.
“We are proud of joining forces with one of India's biggest technology companies and we are prepared to bring additional capabilities into the JV company after the Indian laws allow an increase of shares up to 49 per cent, Bernd Wenzler, CEO Cassidian Electronics, said.
The Indian JV company will provide the armed forces with locally produced high tech equipment and assured life-time support.