Restraining US-based glassmaker Guardian from setting up a 100% subsidiary in India, the Delhi High Court ruled that foreign companies would have to establish their units in collaboration with Indian firms. Allowing the petition of Modi Rubber Ltd (MRL), Justice Gita Mittal restrained the US major & its associates from establishing their manufacturing units of float glass or related products in India. MRL had challenged an order of the Foreign Investment Promotion Board (FIPB) allowing the US company to set up a fully-owned subsidiary in India to manufacture, sell, export float glass products. MRL & Guardian had set up a unit in collaboration to manufacture float glass in Gujarat. The US company could not set up a fully owned subsidiary as the JV was not sick & making profit, argued MRL. Refuting the allegations, Guardian submitted that it would not hurt the interests of Gujarat Guardian Ltd, as it held a substantial 50% stake in the JV.
