Govt clears proposal to induct foreign equity in Tata Advanced Systems

NEW DELHI: The government has cleared a proposal by the Tata group to induct foreign equity in Tata Advanced Systems, a company that produces defence equipment.

TASL, a wholly-owned subsidiary of Tata Sons, had sought government’s approval for the joint venture in which a Lockheed Martin subsidiary will have a 26% stake while the Indian partner will hold the rest.

ET had reported on July 8, that the Tata group has sought approval from the Foreign Investment Promotion Board (FIPB) for its joint venture where Lockheed Martin’s wholly-owned subsidiary, Lockheed Martin Aeroframe Corporation (LMAC), will invest Rs 42.82 crore.

As of now, foreign direct investment in defence sector is capped at 26% and requires prior government approval .

The US-based defence major Lockheed Martin Corporation are the makers of the legendary F-16 fighter jet.

The new company , Tata Aerostructures , will design, develop and manufacture aerospace and aerostructure products. The Indian partner will bring in Rs 121.87 crore in the venture that is also looking to export advanced technology systems to other countries.

There is an export potential of $200 million (Rs 920 crore) over a period of five years, the Tata group had said in its proposal.