Jubilant Bhartia Group plans defence foray

Diversified conglomerate Jubilant Bhartia Group plans to foray into the defence sector by setting up a joint venture with Israel’s Aeronautics Ltd. The proposed venture, Jubilant Aeronautics Pvt Ltd, aims to set up a manufacturing facility in Bangalore for developing unmanned aerial vehicles (UAV).

Jubilant has sent its proposal to the Foreign Investment Promotion Board. Sources said the group has sought the nod for having 26% foreign direct investment (FDI) in the venture.

The proposed JV seeks to tap the growing UAV market in India.
According to estimates, the world UAV market does business of $5.5 billion annually.

The UAV market is being driven by major acquisition programmes, mainly by the US, but also by countries in Europe and the Asia-Pacific.

UAVs are found to be highly effective in urban environments in differentiating between discern combatants from civilians.
They are also being used in oil & gas pipeline monitoring, natural calamity, weather forecasting and disaster management, experts pointed out.

Currently, the FDI level in the defence sector is capped at 26%. But the ministry of commerce and industry recently suggested that the limit could be raised to 74%. However, major businesses, including the Tatas and the Mahindras, are keen that FDI in defence be restricted to 49%. The Cabinet is yet to take a view on relaxing the FDI limit in the defence sector.

The Jubilant Bhartia group is promoted by Shyam Bhartia and Hari Bhartia. It is present in the pharmaceuticals and life-sciences space through Jubilant Organosys Ltd.

The group is also active in oil and gas exploration and productions sector through Jubilant Energy Ltd. It is also a player in finance and IT services through Financial Advisory Services and Jubilant Enpro Ltd, respectively.

Aeronautics Ltd is one of Israel’s leading defence corporations and the second-largest provider of unmanned systems.