India Issues New Guidelines On Forming JVs

The Indian Government has introduced detailed guidelines on for forming joint ventures for Defence Public Sector Undertakings (DPSUs). This comes after private shipyards in the country raised objections after the initial selection of joint venture (JV) partner by Mazagon Dock Limited (MDL). Minister of State for Defence Pallam Raju made the announcement today while addressing the Parliament. MDL has signed a Share Holders' Agreements with Pipavav Defence & Offshore Engineering Company and Larson & Toubro Limited for construction of surface ships and conventional submarines respectively keeping in line with the new guidelines. “MDL has been exercising the option of outsourcing / sub-contracting. As per JV guidelines, DPSUs may enter into JVs only in cases where the partners requires engagement for a longer term and results in achieving either lower costs or better risk management or greater efficiency or shorter timeframes for delivery or enhancing self- reliance in the defence sector as a whole,” according to the defense ministry statement.