L&T JV to export missiles to Europe from Coimbatore SEZ

Business Line
October 29, 2018

M Ramesh

L&T MBDA Missile Systems Ltd, a joint venture between Larsen & Toubro and French company MBDA, is awaiting the grant of an industrial licence to export fully assembled missile systems to Europe. The industrial licence, under the Arms Act,1959, is given by the Union Home Ministry, but has been delegated to the Commerce Ministry. BusinessLine has learnt that the Commerce Ministry will take up L&T MBDA’s application for licence at the Board of Approvals meeting on November 5.
As soon as it secures the licence, L&T MBDA, in which L&T holds 51 per cent, will begin to produce missiles from a leased plant in Coimbatore’s Aspen SEZ in Coimbatore. (The SEZ is owned by the family of Suzlon group founder Tulsi Tanti). L&T has been producing missile subsystems for both Indian programmes and MBDA for the past few years. However, the JV with MBDA, announced in April 2017, is for “nearly full missile assembly except explosives, for export to Europe”, Jayant Patil, Wholetime Director and Senior Executive Vice-President (Defence Business) at L&T, told BusinessLine.
Producing the missiles from an SEZ will help save on customs duties, he said. Components can be purchased from abroad (sources have hinted at Israel) and from L&T’s (Malumichampatti) unit in Coimbatore, which makes rocket motors for ISRO and missile propulsion systems for “Indian customers”. While sources have implied that the investment will be around ₹400 crore, Patil said that since the JV is leasing an SEZ unit, “the investment would be lower (than ₹400 crore), but we may keep investing as it grows in phases.” 
“This JV has been created with a few target programmes. The ATGM5 (Anti-Tank Guided Missile – 5th generation) and the MRSaM (Medium Range Surface to Air Missile), as well as a few other missile programmes are targeted programmes for the JV,” said Patil. The skills and new generation technologies that MBDA has developed for the French army are being made available to India to design, develop and manufacture the ATGM5, says the L&T MBDA website.
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