India’s IT-solutions provider Rolta announced its plans to form a joint venture with Israel’s Meprolight, global leader in electro-optics systems for defense sector.
Two companies entered into a 51/49 equity joint venture, with Rolta holding 52 per cent of the stake. The terms of the agreement are in compliance with Indian rules on foreign direct investment (FDI), which have been recently eased to give greater stake to foreign companies operating in defense manufacturing segment.
In September 2014, India’s Prime Minister Narendra Modi launched an ambitious plan to position India as a global manufacturing hub. This Make-in-India initiative also intends to reduce country’s dependence on foreign suppliers in defense manufacturing. The government has lowered the barriers for foreign defense suppliers entering into partnership with Indian players.
Mumbai-based Rolta, which also provides IT-Solutions in the field of defense and homeland security wants tap into Meprolight’s edge in state-of-the-art technology and manufacturing know-how. The agreement comes with a technology transfer component.
K.K. Singh, Chairman of Rolta India, described the move as an important step in company’s foray into high-tech defense manufacturing in India. The JV intents to manufacture devices for Indian Armed Forces, Paramilitary Forces and State Police.
A senior executive at Meprolight described the JV as a “win-win partnership” which will increase Meprolight global footprint. In recent years, Israel has positioned itself as the preferred supplier of defense electronics and high-tech defense systems to India.
In keeping with bilateral defense regulations the Joint Venture is subject to approval from Israeli and Indian government authorities.