In a move that would put India on the global aviation technology map, the government on Thursday approved the creation of a joint venture company by public sector company Hindustan Aeronautics Ltd and French firm SNECMA Moteurs for manufacture of spares and parts of civilian aircraft engines.
The initial expenditure of Rs 50 crore (Rs 500 million) in the JV was also approved by the cabinet at its meeting chaired by Prime Minister Manmohan Singh, Defence Minister Pranab Mukherjee said in New Delhi.
It approved a 50:50 equity participation by the two partners in the JV company, the formation of which would lead to outsourcing of aero engine components by HAL and SNECMA at competitive rates, he said.
The minister said SNECMA, one of the leading global firms producing aero engines, would transfer technology to HAL and buy all products of the JV company initially.
The JV would be involved in producing precision components of engines for civilian aircraft.
While there would be an increase in export potential from the JV company, it would also enable introduction of advanced technologies and management practices, besides inflow of foreign direct investment and generating employment for Indian nationals, Mukherjee said.
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