A week after Sheffield Forgemasters had a loan cancelled by the government, the company has clinched a £30m deal with India’s largest power equipment maker.

Last week Chief Secretary to the Treasury Danny Alexander said he was scrapping a loan for a 15,000 tonne press that was promised by the Labour government.

But this week Sheffield Forgemasters signed a contract with Bharat Heavy Electricals to develop power generation forgings on the sub-continent.

The ten-year partnership will see state-run BHEL buy specialist technology and engineering knowledge from Forgemasters and will give the Sheffield firm a strong foothold in central Asia.

The official launch of the trade agreement was marked by a visit to Sheffield from Indian government representatives and BHEL management.

Forgemasters chief executive said: “This arrangement with our colleagues from BHEL is a great step forward and reinforces an already strong trading partnership between Forgemasters and India.

“The deal will see us help build new steel making and forging facilities to manufacture forgings for power generation projects servicing India’s domestic market. The Indian power generation market provides a unique opening for us. It is all about extending our reach and benefiting from sharing our knowledge.

“This is also an important business development deal which will deepen our relationship with BHEL. Funds will be generated from a technology transfer fee and also royalties of sales of these new products, which will be ploughed back into Forgemasters’ ongoing research and development programme here in the UK.”

BHEL chairman Shri B.P.Rao said: “Forgemasters is a world renowned company and we have always admired the high standard of work they do. We are all looking forward to initiating what I’m sure will be a wonderful project for both companies.”

BHEL has an orderbook of £4.5bn and a turnover of £4bn.