In a statement issued after a meeting of the Foreign Investment Promotion Board, the Indian Ministry of Finance said, "Decision has been deferred on an approval sought by DCNS to set up a company in India (IndiaCo) for the purposes of conducting the business of undertaking design and industrialization studies, research and development activities and manufacturing and maintenance in relation to air independent propulsion systems for submarines."
Last month, India permitted foreign investment beyond 49% with government approval, but only in cases resulting in access to modern technology in the country or for other reasons to be recorded. Sources says that Ministry of Defense is yet to firm up its mind whether DCNS' proposal entails access to modern technology or not.
It is said that Germany and Sweden have the best AIPs, while India itself is working on developing modern AIPs. In March this year, the Department of Industrial Policy and Promotion approved issuance of a license for manufacturing AIPs to Anil Ambani led Reliance group of India.