The agreement includes a 50% offset obligation.
The JV, called Dassault Reliance Aerospace, will support the development of major Indian programmes with high levels of technology transfer to benefit the entire aerospace sector, Reliance said in a statement.
It will also promote research and development projects under the Indigenously Designed, Developed and Manufactured (IDDM) programme, a new initiative by Indian Defence Minister Manohar Parrikar.
Dassault Aviation chairman and CEO Eric Trappier “The formation of this Joint venture with Reliance Aerospace led by Anil Ambani’s Reliance Group illustrates our strong commitment to establish ourselves in India and to develop strategic industrial partnerships under the 'Make in India' policy promoted by the Indian Government.”
The twin-jet fighter aircraft, Rafale, can operate from either an aircraft carrier or a shore base to carry out all combat aviation missions.
It can be used for air defence, interception, ground support, in-depth strikes, reconnaissance, anti-ship strikes and nuclear deterrence.
Reliance Group chairman Anil Ambani said: “We are delighted to partner a world leader in aviation like Dassault Aviation, and a visionary leader like Eric Trappier.
"This is a transformational moment for the Indian Aerospace sector and for Reliance Infrastructure’s subsidiary Reliance Aerospace.”