NEW DELHI: The Union Cabinet chaired by Prime Minister Modi on Wednesday cleared the purchase of 56 transport aircraft for the Indian Air Force (IAF) from Spain's Airbus.
Of these, 16 aircraft are to be delivered in flyaway condition within four years and 40 to be manufactured in India within 10 years by a TATA consortium that Defence Minister Rajnath Singh hailed as "a major boost to Atmanirbhar Bharat."
He said all 56 aircraft will have indigenous electronic warfare suite while several MSMEs spread over the country will be involved in the manufacture of parts of the aircraft. This is for the first time that a private Indian company (Tata) will be producing a military aircraft, he said.
The price tag was not specified for the purchase of the aircraft of 5 to 10 tonne capacity that will replace the ageing Avro aircraft, in use for the last 60 years. Sources, however, said the deal could potentially cost between ₹20,000 crore and ₹21,000 crore, depending on the exchange rate.
The Spanish manufacturer is also bound by the offset obligation through direct purchase of eligible products and services from the Indian offset partners, the announcement added.
The Spanish C-295MW is a transport aircraft of 5-10 Tonne capacity with contemporary technology. It has a rear ramp door for quick reaction and para dropping of troops and cargo.
Under the project, around 600 highly skilled jobs are expected to be generated 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 will be generated within the ae