Tata, Airbus join Make in India push, to manufacture defence aircraft

India's Tata group and Airbus will make the C-295 transport aircraft in the country, the government said on Thursday, the first such production by a local private company amid a push for an expansion of defence manufacturing.

India, among the world's largest defence importers, has been trying to cut its reliance on foreign firms and increase local output. Only state-owned Hindustan Aeronautics Ltd currently makes aircraft, mainly for the armed forces.

Prime Minister Narendra Modi will lay the foundation stone of the new aircraft manufacturing project in his home state of Gujarat on Sunday.

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

The project, valued at 219.35 billion rupees ($2.66 billion), involves the supply of 56 C-295 MW transport aircraft for the Indian Air Force. Airbus will deliver 16 aircraft in flyaway condition between September next year and August 2025, while the rest will be made by Tata group, including its software unit Tata Consultancy Services and Tata Advanced Systems Ltd.

The first made-in-India aircraft is expected from September 2026, the ministry said.

"The project offers a unique opportunity for the Indian private sector to enter into the technology-intensive and highly competitive aviation industry," the statement said, adding it would reduce import dependence and likely increase exports.

The aircraft, which will replace the Air Force's ageing British Avro fleet, will be fitted with equipment from Bharat Electronics Ltd and Bharat Dynamics Ltd. Once delivery of the 56 aircraft is completed, Airbus will be able to sell the India-made planes to civil operators and export to countries cleared by the Government of India.