The Ministry of Defence on Thursday said that a manufacturing facility to produce Airbus C295 transport aircraft will be set up in Gujarat’s Vadodara.

The facility’s foundation stone will be laid by Prime Minister Narendra Modi on October 30.

The facility is part of the Rs 21,000-crore deal between India and German aeronautics company Airbus Defence and Space. New Delhi will procure 56 C-295 transport aircraft under the deal, which was signed in September 2021.

Airbus will deliver 16 aircraft in ‘fly-away’ condition by 2025 after which 40 aircraft will be manufactured and assembled in India by Tata Advanced Systems.

This is the first time when a military aircraft will be manufactured in India by a private company. The C-295 aircraft will replace the ageing Avro aircraft of the Indian Air Force.

“The project offers a unique opportunity for the Indian private sector to enter into the technology-intensive and highly competitive aviation industry,” the Ministry of Defense said. “It will augment domestic aviation manufacturing resulting in reduced import dependence and expected increase in exports.”