In a major decision, the Cabinet Committee on Security on Wednesday approved the procurement of 56 C-295 medium transport aircraft for the Indian Air Force to replace its ageing Avro planes which were first inducted around 60 years ago.
Sixteen aircraft will be delivered in a flyaway condition by the Airbus Defence and Space of Spain within 48 months of signing the contract while the remaining 40 planes will be manufactured in India, according to the defence ministry.
The cost of the procurement is expected to be in the range of Rs 18,000 to Rs 20,000 crore, people familiar with the project said.
The 40 planes will be manufactured in India by a consortium of the Airbus Defence and Space and Tata Advanced Systems Limited (TASL) within 10 years of signing the contract.
'Today, Cabinet Committee on Security approved the procurement of 56 C-295MW transport aircraft from M/s Airbus Defence and Space SA, Spain for the Indian Air Force,' the defence ministry said in a statement about the decision by the prime minister-led committee.
The C-295MW aircraft is a transport plane of 5-10 tonne capacity.
'Sixteen aircraft will be delivered in flyaway condition from Spain within 48 months of the signing of the contract and forty aircraft will be manufactured in India by TATA consortium within 10 years of the signing of the contract,' the ministry said.
'This is the first project of its kind in which a military aircraft will be manufactured in India by a private company. All 56 aircraft will be installed with indigenous electronic warfare suite,' it said.
The in-principle approval for the Avro replacement programme was accorded around nine years ago.
'All 56 aircraft will be installed with indigenous electronic warfare suite. The project will give a boost to the aerospace ecosystem in India wherein several MSMEs spread over the country will be involved in manufacturing of parts of the aircraft,' the ministry said.
A large number of detail parts, sub-assemblies and major component assemblies of aero structure are scheduled to be manufactured in India.
'The programme will act as a catalyst in employment generation in the aerospace ecosystem of the country and is expected to generate 600 highly skilled jobs directly, over 3000 indirect jobs and an additional 3000 medium skill employment opportunities with more than 42.5 lakh man-hours of work within the aerospace and defence sector of India,' the ministry said.
'During the process of manufacturing in India, it is expected that all the suppliers of TATA Consortium who will be involved in special processes will gain and maintain globally recognized National Aerospace and Defence Contractors Accreditation Program (NADCAP) accreditation,' it said.
The ministry said the programme will provide a major boost to the 'Atmanirbhar Bharat Abhiyan' (self-reliant India initiative) as it offers a unique opportunity for the Indian private sector to enter into technology-intensive and highly competitive aviation Industry.
'The project will augment domestic aviation manufacturing resulting in reduced import dependence and expected increase in exports,' it said.
The ministry said before completion of the deliveries, a servicing facility for C-295MW aircraft is scheduled to be set up in India.
'It is expected that this facility will act as a regional MRO (maintenance, repair, and overhaul) hub for various variants of C-295 aircraft,' it said.
'In addition, the OEM (original equipment maker) will also discharge its offset obligations through direct purchase of eligible products and services from Indian offset partners giving a further boost to the economy,' it added.