The Maintenance, Repair and Overhaul (MRO) facility will be set up in New Delhi and it is expected to be operational by June 2016.
A Memorandum of Understanding (MoU) between PHL and HAL has been signed at India Aviation 2016, the country's largest civil aviation conference and exhibition underway here.
"PHL and HAL are collaborating with each other for setting up MRO business for defence and civil helicopter industry, which has a potential to provide an efficient, cost effective, better turnaround time for the customers," PHL said in a statement.
The MoU was signed by top officials of the two companies in the presence of Civil Aviation Minister Ashok Gajapati Raju and Civil Aviation Secretary R.N. Choubay and the chairmen of HAL and Pawan Hans.
Civil aviation industry in India has ushered in a new era of expansion driven by suitable growth factors.
As per international forecasts, the fleet size of helicopters in civil segment in India is expected to go up to 800 from the present 280 in the next 10-15 years. Fleet expansion and replacement of the ageing machines are likely to contribute to this growth.
Currently there are some 1,200 helicopters with defence customers. There may be a demand of 800-1,000 new helicopters in the next one decade, said the statement.
The draft civil aviation policy gives the required and emphatic boost to the MRO sector.