In a joint statement, the consortium, in which British firm BAe Systems owns a 37.5 percent stake, said it would set up a factory either in India or Europe to make the missiles and export them to other nations.

Both the firms are already in a joint venture to produce Indian and Milan ER anti-tank missiles. The Milan ER missiles have been produced under licence from MBDA by Bharat Dynamics since 1981 for the Indian military.

The Indian state-owned missilemaker, Bharat Dynamics, and the European consortium gave no financial details about the deal.

The European Aeronautic Defence and Space Company holds 37.5 percent of MBDA while Italy's Finmeccanica has 25 percent.