Swedish defence and aerospace firm Saab is to partner with India's Quest Global for the manufacture and supply of aerostructure assemblies for the civil aerospace market.
The two have formed a joint venture in which Saab will hold a 26% share.
Saab says the deal will allow it to "leverage" Quest's manufacturing strengths to provide cost-effective products to help it "remain competitive in a global market".
It will also help it cope with increasing production rates on civil airliner programmes, it says.
The new company will be located in Belgaum, Karnataka in India where Quest's operations are located. It will initially employ 50 people but this could rise to as many as 400, says Saab.
Facilities for the new operation will be constructed in 2013.