Stockholm - A final agreement was signed Monday to create a joint venture between Swedish heavy-vehicle maker Volvo and Eicher Motors in India.

Volvo was to have a direct and indirect ownership interest of 50 per cent in the company planned to be known as VE Commercial Vehicles. The joint venture includes Eicher Motors' truck and bus operations and the Volvo Group's Indian truck sales operations, a statement from Volvo said.

The Volvo Group, which does not include the Ford Motor Company-owned car division, was to pay 1.84 billion kronor (312 million dollars). Part of the sum included expanding its current stake in Eicher Motors.

"This agreement provides a very solid platform for further growth on the Indian market for heavy trucks, which is the fourth largest in the world," Par Ostberg, head of the Volvo Group's Asian truck operations, said in a statement.

Approval from competition authorities was still pending. A letter of intent between the groups was inked in December. (dpa)