Switzerland-based textile machinery maker Rieter has become embroiled in a dispute with its Indian joint-venture partner Lakshmi Machine Works (LMW) over Rieter's plans for a new Indian production site.

Rieter plans to grow the facilities of wholly owned subsidiary Suessen India, but LMW has invoked Press Note 1 to bar the activity as it holds a share of about 13% in LMW and believes the new venture would have a negative effect on its business.

Press Note 1 can prevent overseas businesses that have more than 3% share of an Indian venture from setting up operations in the same field.