The energy giant Reliance Industries Ltd and Russian petrochemical firm Sibur have agreed to set up a joint venture to make butyl rubber in India amid rising demand from the auto industry, the firms said on Sunday.
Financial details of the deal were not disclosed but the companies said in a joint statement the butyl rubber will be produced at Reliance's integrated petrochemicals site in Jamnagar in western India.
Under the deal, SIBUR will provide proprietary technology to the joint venture while India's top listed firm will supply inputs and infrastructure, they added.
The Indian economy is projected to expand 8.5 percent in the 2010/11 year that started on April 1, and is one of the few regions in the world where demand for automobiles has been rising in double digits.
Vehicle sales are expected to hit a record high for the second year in a row in 2010/11, as rising incomes in a rapidly growing economy boost demand.
Car sales rose an annual 39.5 percent in April, the strongest rise in at least a decade, showing consumer demand in one of the world's fastest growing markets remained robust despite a rise in prices.