Israeli soldiers from Rafael- Israel's Armament Development Authority, prepare the new drone (remote-piloted vehicle) before a demonstration for the Israel Defence Forces In Gahash near Tel Aviv November 21, 2005. REUTERS/Gil Cohen Magen

JERUSALEM (Reuters) - State-owned Israeli defense contractor Rafael Advanced Defense Systems and India’s Reliance Defense said on Tuesday they are setting up a joint venture in India to produce air to air missiles, air defense systems and observation balloons.

The companies will address programs valued at $10 billion over the next decade.

Reliance Defense, a unit of Reliance Infrastructure RLIN.NS, will hold 51 percent of the joint venture and Rafael, one of Israel's largest defense firms, will hols the other 49 percent.

Rafael is a market leader in the air to air missile segment with products such as Python and Derby. Its air defense systems portfolio includes a number of short and medium range missiles.

Rafael has already provided large aerostat systems to the Indian Air Force for its surveillance, reconnaissance, communication and intelligence needs, the companies noted.

The joint venture will offer the entire range of products in these fields to the Indian armed forces, they added.