EADS is hopeful of reversal of the decision of Foreign Investment Promotion Board, which has rejected its JV proposal with L&T to supply electronic warfare system to the Indian defence sector.
The tie-up is understood to have been rejected because the Airbus group’s stake in the JV exceeds the FDI cap of 26% in a defence venture.
A senior L&T executive said, “We are talking to the ministry and are hopeful they will understand.” Another person in the know, “while the European major’s holding (24.5%) in the JV is within the FDI limit, it exceeds the cap in R&D.”
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