The new joint venture (JV) will provide maintenance, repair and overhaul (MRO) services for helicopter engines.
HE-MRO will provide MRO services for Safran TM333 2B2 and HAL Shakti engines installed on HAL-built helicopters operated by the defence services.
Indian Defence Minister Manohar Parrikar said that the JV would create new jobs, while contributing to the state's economy.
Parrikar added: “This is the right place for MRO activities related to helicopter engines.
"We have a local talent to meet the skill requirement for the project.”
The Indian armed forces currently operate more than 1,000 engines, including 250 TM333 and 250 Shakti.
They are said to be one of the largest operators of Safran-designed helicopter engines.
Shakti is the Indian designation for the Safran Ardiden 1H1 and it is fitted to HAL’s ALH/Dhruv. It has also been selected to power the HAL-designed light combat helicopter (LCH).
The Ardiden 1U variant of Shakti powers a new three-ton single-engine aircraft that made its maiden flight in September 2016.
Safran Helicopter Engines CEO Bruno Even said: “HE-MRO marks a new step in the long-lasting and fruitful partnership between Safran and HAL.
“We are extremely proud of the continued confidence placed in us by HAL.
"Together we are committed to delivering world-class support to our customers, both in India and throughout the region”.
Besides carrying out overhaul activities, the JV will also provide support through Certified Maintenance Centers located centrally at customer bases.