Reliance Industries Ltd (RIL), India's largest private sector company, on Tuesday said it 'had entered into a definitive agreement for a joint venture in business with China's Shandong Ruyi Science and Technology Group (Ruyi).

According to the agreement, RIL will transfer its existing textile business under the Vimal brand into a newly incorporated company in which RIL will hold 51 per cent stake. The remaining 49 per cent stake will be sold to Ruyi.

Fair trade regulator CCI has approved Reliance Industries' proposed deal. On January 7, the CCI had received a CSTT Co Holdings received a notice seeking the regulator's nod on the deal.

Further, RIL's trademark 'Vimal' would be licensed to the textile company. The combination also involves licensing of the 'Georgia Gullini' trademark by Gullini Fashions Private Ltd -- an Indian arm of China-based textile firm RuYi.

The Competition Commission of India (CCI) said the proposed combination is not likely to have an appreciable adverse effect on competition in India.

Under the proposed deal, CSTT Co Holdings -- an investment arm of textile firm RuYi -- would acquire 49 per cent stake in a textile company to be incorporated by RIL as its wholly owned subsidiary. The subsidiary will house RIL's textile business.

Textile happens to be founding business of USD 75-billion RIL group, which has since emerged as a major player in energy and retail businesses and is now expanding big time into telecom arena as well, among others. The textile division of RIL is into manufacture yarn, fabric for men's suiting, trousers and shirting, among others.

According to the Commission, RIL and RuYi have an overlap in men's shirting, suiting and trouser fabric and in the men's readymade trouser segments of the textile industry.

CCI said that it is observed that in all these segments, the share of both RuYi and RIL is insignificant and numbers of other players are present.