India firm in defense venture with EADS

Larsen & Toubro Ltd, India's biggest engineering company, will form a defense venture with European Aeronautic Defence & Space Co as the nation bolsters security to match increased military spending by Pakistan.

The venture will design, develop and make radar, military avionics, electronic warfare, and mobile systems, the partners said yesterday in a joint statement in Mumbai. The new company, subject to Indian government approval, will have an initial investment of 1 billion rupees ($20 million) and be ready to receive contracts by early next year.

India, enhancing its military against its nuclear-armed neighbors, had earmarked as much as 1.06 trillion rupees of defense investment for the last fiscal, 10 percent more than the previous year. India's arms purchases may triple in five years to more than $35 billion and imports may account for 70 percent of that.