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Moumita Bakshi Chatterjee

New Delhi, Nov. 10 The Foreign Investment Promotion Board has turned down a proposal by Mumbai-based GELD Consultancy Services to set-up a joint venture with two Chinese companies, for Global Positioning System (GPS) hardware and software.

The Ministry of Home Affairs has pointed out that proposed venture involving Chinese companies — Jiansu Tianze Information Industries and Franke Gmkp Energy Control — for GPS products and services would not be desirable on security considerations. The companies’ venture was proposed to be located in Mumbai.

In its application to FIPB, the company stated that the objective of the proposed venture was to set up a facility in GPS, related products and services in India.

According to the proposal, during the initial stage the proposed company would import fully assembled products and systems from Tianze in China and would develop and customise the software to Indian conditions and applications and market and sell the products in India.

Under the proposal, the joint venture would also be able to source the products independently subject to testing and approval by Tianze. “Meanwhile the venture would also start manufacturing in India using accessories by Tianze and other sources locally,” the applicant had said.

Approval was sought to set up a new company, SFT Technologies, with foreign equity of 60 per cent to be contributed jointly by the two foreign companies. The balance 40 per cent stake was proposed to be held by GELD Consultancy Services.

After being deferred on two previous occasions (July and September), the proposal again came up for discussion in a recent FIPB meeting in October-end. While the Department of Telecom and Department of Industrial Policy and Promotion did not raise objections, MHA stated that “there are ample opportunities for the Chinese partners to exploit the involvement to track developments at sensitive locations and movement of sensitive consignments and individuals.”

The companies could not be reached for comments.

More Stories on : Alliances & Joint Ventures | Foreign Direct Investment | Hardware | Software

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