Calcutta: Skipper Ltd, the city-based manufacturer of power transmission towers and PVC pipes, has formed a limited liability partnership with Israeli firm Metzerplas to explore drip irrigation potential in India.

The 50-50 partnership, called Skipper-Metzer India LLP, will set up a manufacturing unit near Hyderabad and has lined up an investment of $8 million in the first phase.

Drip irrigation is a process that focuses on saving water and nutrients by allowing water to drip slowly to the roots of the plant. At present, the domestic industry size is estimated at Rs 5,000 crore, Skipper director Devesh Bansal said on Friday.

States such as Rajasthan, Andhra Pradesh, Maharashtra, Gujarat, Karnataka and Tamil Nadu together constitute close to 90 per cent of the micro-irrigated land in India.

Area under micro-irrigation has grown at 8 per cent compounded annual growth rate over the last six years to 9.1 million hectares, representing a 13 per cent of potential 69.5 million hectares. Subsidy remains a key driver helping farmers to bear the cost of micro-irrigation.

"Drip irrigation holds immense potential and is a focus sector of the government. The area covered under drip irrigation is expected to increase. Based on the potential, we have formed an equity partnership with Metzerplas," Bansal said.

"We plan to set up a unit in Hyderabad in phase 1 and we can scale up the manufacturing base. We might consider adding another manufacturing unit in western India in future," Bansal said. Operations are expected to start by September this year.

According to Skipper, the joint venture will leverage Metzerplas's global portfolio of brands and expertise in advanced plastics and irrigation technologies. Skipper in turn will leverage its manufacturing bandwidth and nationwide presence and knowledge of government operations.