The facility of Indian Rotorcraft will be at the Rajiv Gandhi Airport in Hyderabad and will assemble, customize and flight test new helicopters for the international market.
The first aircraft it will produce is the AW119Ke light helicopter, beginning next year.
"We are very pleased through our joint venture with Tata Sons to be playing an important role in the development of the Indian aerospace industry," AgustaWestland Chief Executive Officer Bruno Spagnolini said at a ground breaking ceremony.
"Not only will this new facility be able to build helicopters for the Indian market but importantly it will supply helicopters to AgustaWestland customers around the world.
"Indian Rotorcraft will initially create jobs for more than 70 highly skilled staff who will be trained by AgustaWestland. We see great potential to expand this facility in the future to become a support center and production center for other helicopter types."