New Delhi, Jan 21 (IANS) India Thursday gave its approval to a proposal from Alstom of France to set up a joint venture with Bharat Forge to make power equipment involving foreign direct investment inflow of 70 million euros or Rs.490 crore.

The approval was given at a meeting of the Cabinet Committee on Economic Affairs, which was presided over by Prime Minister Manmohan Singh, based on the recommendations of the Foreign Investment Promotion Board, according to an official statement.

"The proposal is to establish two joint venture companies in India with Bharat Forge or its affiliate companies and to invest 70.5 million euros to manufacture state-of-art super-critical and sub-critical power plant equipment in India," the statement said.

Listed on the Bombay Stock Exchange and the National Stock Exchange, Alstom's India arm has a turnover of over $500 million, and employs 4,000 people at its research unit in Bangalore, a technology centre in Vadodara and four manufacturing units.

Apart from offering its capabilities in engineering, manufacturing, project management and supply of power generation equipment, the Indian arm also has a major presence in the transport sector, providing railway equipment and solutions.

Bharat Forge is the flagship of the $2.4-billion Kalyani Group, with interests in manufacturing various forged and machined components for the automotive and non-automotive sector.

It is also one of India's emerging multinationals, with manufacturing operations across 12 locations in six countries -- four in India, three in Germany, two in China and one each in Sweden, Scotland and the US.