In a major development, the Cabinet Committee on Security yesterday (8 September) approved the procurement of 56 C-295 transport aircraft for the Indian Air Force (IAF) from the Tata-Airbus combine under a deal expected to be worth $2.5 billion.

Out of 56, 16 aircraft will be delivered in flyaway condition from Spain, while the remaining 40 will be manufactured in India.

These 56 C-295MW transport aircraft of Airbus will replace the ageing Avro aircraft of the Indian Air Force.

"In an important decision, Govt yesterday approved the procurement of 56 transport aircraft for Rs 22,000 crores for IAF. This is a historic decision. This is the first time that a private Indian company will participate in manufacturing in the field of aviation," said the defence minister.

The C-295MW aircraft is a transport aircraft of five to 10 tonne capacity with contemporary technology. The aircraft has a rear ramp door for quick reaction and para dropping of troops and cargo.

Sixteen aircraft will be delivered in flyaway condition from Spain within 48 months of signing of the contract, and 40 aircraft will be manufactured in India by the TATA Consortium within 10 years of signing of the contract.

"This is the first project of its kind in which a military aircraft will be manufactured in India by a private company," the Defence Ministry said in a statement.

All the 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.

The programme will provide a major boost to the 'Aatmanirbhar Bharat' mission of the government as it offers a unique opportunity for the Indian private sector to enter into the technology intensive and highly competitive aviation industry.

The project will augment domestic aviation manufacturing, resulting in reduced import dependence and expected increase in exports.

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 3,000 indirect jobs and an additional 3,000 medium skill employment opportunities with more than 42.5 lakh man hours of work within the aerospace and defence sector of India.

It will involve development of specialised infrastructure in the form of hangars, buildings, aprons and taxiway.

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 recognised National Aerospace and Defence Contractors Accreditation Programme (NADCAP) accreditation.

"Before completion of deliveries, a 'D' Level servicing facility (MRO) for C-295MW aircraft is scheduled to be setup in India. It is expected that this facility will act as a regional MRO hub for various variants of C-295 aircraft," the ministry said.

In addition, the original equipment manufacturer will also discharge its offset obligations through direct purchase of eligible products and services from Indian offset partners, giving further boost to the economy.

With IANS Inputs