Israeli defense company, Elbit Security Systems had increased its stake in the joint venture (JV) with India’s Alpha Design Technologies Pvt. Ltd from 26% to 49%, the Indian company said on July 6. However, the financial details of the transaction were not disclosed.
The agreement was signed during Indian Prime Minister Narendra Modi’s visit to Israel last week.
The JV, Alpha-Elsec Defence & Aerospace Systems Pvt. Ltd. was formed in 2005 as a 74:26 venture. The agreement came after the Modi government raised the defence sectoral cap on foreign direct investment (FDI) to 49%.
According to the agreement, Alpha, a direct supplier of defence equipment for the Indian Armed Forces, and Elbit will set up new facilities in Bengaluru in Southern India to manufacture an expanded range of niche technology products for the military.
“The inking of the agreement enhances the scope of operation of the joint venture company into niche technological areas such as new generation thermal imaging equipment, fire control systems, mini and medium unmanned aerial systems, in addition to night vision devices, laser range finders, laser pointers, reflex sights, among others,” a release from Alpha said, citing its head Col. (retd) H.S. Shankar. The venture plans to export at least 50% of its production.
Elad Aharonson, executive vice-president and general manager of Elbit – ISTAR Division, was quoted as saying, “Together with Alpha Design, we have completed two major contracts for the upgradation of armoured vehicles. [They are] 969 sets of thermal imaging sighting kits for the BMP-2 and 1,000 sets of thermal imaging-based fire control systems for the T-72, including providing installation and life cycle support for these systems to the Indian Defence Forces.” BMP-2 and T-72 are Russian origin infantry combat vehicle and the main battle tank respectively
The expanded joint venture, he said, would combine the development capabilities of Elbit in opto-electronics and mini, medium-sized UAVs with Alpha Design’s production and technological capabilities.
Avi Mizrachi, Executive VP – Business Development of Elbit Systems, said, “India has been a key market for us and the Make-in-India initiative requires that International Companies like Elbit should expand operations in India through strategic alliances with Indian Partners. Our successful association with our Indian Partner Alpha Design in the last few years has resulted in forging a strong technological and business partnership in the form of the JVC and we look forward to continued growth in India.”