The Special Economic Zone, to be set up near Khed, will be jointly developed with the Maharashtra government. The company signed the Memorandum of Understanding with the state on Wednesday.
Bharat Forge and Maharashtra Industrial Development Corporation have formed a special purpose vehicle, with the former holding 74 per cent stake for the project.
"We will initially invest Rs 1,500-2,000 crore (Rs 15 to 20 billion) in the venture and eventually touch Rs 9,000 crore (Rs 90 bilion) by next 9-10 years. We hope to commence the SEZ's operations by next 2-3 years," Bharat Forge CMD B N Kalyani said.
The SEZ is expected to attract investments to the tune of Rs 25,000 crore (Rs 250 billion) and generate employment for 1,20,000 professionals. The SEZ project will initially cover 2,000 hectares of area and gradually double its size to spread over 5,000 hectares.
The company will set up an engineering institute in the SEZ to tackle the manpower crunch faced by the manufacturing industry in the country.
"We are negotiating with Warwick University in the UK for the institute... we will train students with a science background for 2-3 years and award them degrees," said Kalyani. BFL is also setting up a Rs 300 crore (Rs 3 billion) non-auto component manufacturing unit near Baramati in the same district.