Reports noted that Larsen & Toubro (L&T) and the Franco-German aerospace and defence group, EADS, are re-working their defence joint venture plan after the earlier plan failed to get clearance from the Government on the grounds that it was not in conformity with its FDI policy. As per the revived plan, L&T will hold 74 per cent of the proposed JV and the rest will be held by EADS.

L&T is planning to step up its defence business from the current levels of Rs. 400 crore to Rs. 2,500 crore in the next five years and the proposed JV with EADS was considered crucial in that regard. A spokesperson for EADS Defence and Security meanwhile asserted that India “is a key market.”1

• 1. Abhinaba Das & Kausik Datta, ‘L&T, EADS revive JV plans; to tweak equity structure to clear FDI hurdle’, The Economic Times, February 5, 2010