HYDERABAD: The Tata Group is planning a major investment in Andhra Pradesh in the defence sector. Nova Integrated Systems, the group's joint venture with Israel Aerospace Industry (IAI), has sought about 75 acres of land at Ibrahimpatnam near Hyderabad to develop advanced technology systems for the country's defence sector.

"The facility will be used for manufacturing and assembling micro unmanned aerial vehicle (UAVs) and other highly advanced aerospace related equipment for the Indian defence sector. We expect to start work for the facility next year," said BP Acharya, principal secretary, industries & commerce. Nova Integrated Systems, a 76:24 joint venture between IAI and Tata Group under its subsidiary Tata Advanced Systems (TAS), is looking at an initial investment of around $200 million, of which $50 million will come from IAI.

"The project is currently awaiting clearance from the central government. We will finalise the investment details once we get the government nod," said an official of Nova.

The facility will also help IAI meet the offset defence procurement policy of the central government. Introduced in the 2005, the offset clause makes it mandatory for a foreign vendor, who bags a deal over Rs 300 crore, to plough back at least 30% of the contract value back into India or source defence products or services from the country of that value.

This is touted as one of the major defence deals signed by Tata Advanced Systems. The group has also signed agreements with Boeing, US-based Sikorsky Aircraft Company and the European Defence and Aerospace Consortium. The Tata Group has already set up a helicopter cabin manufacturing facility for Sikorsky in the 295-acre aerospace SEZ near Hyderabad. "It has already invested about Rs 300 crore for this. The group is also planning to expand this facility further so that the entire S92 helicopter can be manufactured here,"said Acharya. Besides Tata Group, Mahindra & Mahindra has also sought 50 acre of land in the aerospace SEZ for its defence projects. Source: ET 9/11/10