BP is to make one of the biggest foreign direct investments in India through an oil and gas tie-up with Reliance Industries, which involves the oil major paying $7.2 billion to the Indian company.

Under the terms of the deal, BP will take a 30 percent stake in 23 oil and gas blocks and form a 50:50 joint venture between the two companies for the sourcing and marketing of gas, the companies said in a statement on Monday.

"This partnership combines the skills of both companies and will be focused on finding more hydrocarbons in the deep water blocks of India and significantly contribute to India's energy security," Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited, said in the statement.

BP will pay Reliance Industries an aggregate consideration of $7.2 billion and future performance payments of up to $1.8 billion could also be paid if exploration success leads to the development of commercial discoveries.

"This partnership meets BP's strategy of forming alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets," BP Chairman Carl-Henric Svanberg said in the statement.

The companies said the future performance payments and the combined investment could amount to $20 billion in total.

BP already has a presence in India in addition to its interest in deepwater block called D-17, which it has been working on with Reliance since late 2008.