Initial investment of $5 million, production to start by September
Aditi Divekar |
Last Updated at January 27, 2020 21:40 IST
Delhi-based Jindal Defence, part of O P Jindal Group, today announced its foray into small arms manufacturing in India via a joint venture (JV) agreement with Taurus Armas S.A., of Brazil.
With an initial investment of $5 million in a project that is to be developed in phases, the agreement proposes setting up a plant at Hisar (Haryana). The venture has equity participation from Jindal Defence and Taurus Armas S.A, in the equity ratio of 51:49.
This move by the Abhyuday Jindal-promoted Jindal Defence is expected to bolster Indo-Brazil cooperation in the strategic defence sector, the former said in a release today.
The JV company will make small arms in India based on transfer of technology from Taurus to achieve localisation of production in accordance with the Defence Procurement Procedures, said the release.
This partnership aims to maximise existing domestic opportunities in the small arms manufacturing sector and provide significant support to the ongoing and future modernisation plans of the Armed Forces, particularly the Indian Army, the Para-Military, and State Police Forces.
Further, this move is in sync with the government’s vision of greater private sector participation in defence hardware manufacturing.
While the production of the arms will take place in Hisar, the venture is expected to come up with its production by September FY21, said a source close to the development.
“The JV company envisages creation of world-class infrastructure along with adoption of best manufacturing practices to achieve perfection in design and engineering, and achieve high quality standards. Moreover, with the technological expertise emerging with this JV, we aim to support the emerging demands of the Indian Armed Forces”, the release quoted Abhyuday Jindal as saying.
Currently, Abhyuday Jindal is also the managing director of Jindal Stainless Limited.
Jindal has been eyeing the defence space for a while now. In 2017, as part of its expansion strategy, Jindal Stainless had plans to enter defence, nuclear energy and aerospace among other niche segments.
In March 2017, Jindal Stainless had signed a licence agreement with the Defence Research & Development Organisation (DRDO) to make high nitrogen steel (HNS) for armour applications, at the Hisar plant. DRDO was to transfer the technology.