The $1 million factory would help the West African country in reducing dependency on imports of jute bags for packaging cocoa, according to the news agency.
Isaac Osei, Cocobod Chief Executive and Abhishek Poddar, Director of Ganges Jute, jointly signed the MoU in Accra on Thursday.
The Indian company would build the factory as a joint venture in the country's second largest city Kumasi, it said.
The facility would also save cost, facilitate operations and generate employment and foreign exchange for the African country.
The factory would be solely financed by Ganges with Cocobod providing a seven-warehouse facility, as its equity.
Poddar said the company had started the necessary administrative work and was also prepared to begin the project.
He said the company would also finance a $ 5 million complete jute-manufacturing factory in the country, if the operations of the stitching factory were successful.
Osei said jute bags remained an important input in cocoa production and as such its local manufacturing would facilitate supply of the bags for cocoa packaging.
"With this, we can plan ahead and it would no longer be necessary for us to stock huge quantities during every session," he added.
Ghana is world's second biggest cocoa grower and its economy depends on cocoa exports.
