The Ministry of Defence (MoD) on Thursday announced it had, for the first time, entrusted a private firm — Tata Advanced Systems (TASL) — to manufacture an entire aircraft for the military. On September 24, 2021, MoD had signed a Rs 21,935 crore contract with Airbus for 56 C-295 aircraft.

Prime Minister Narendra Modi will lay the foundation stone on Sunday for a plant in Vadodara that will manufacture the C-295 transport aircraft. This contract is expected to support the development of India’s aerospace ecosystem, bringing investment and 15,000 skilled direct jobs and 10,000 indirect positions over the coming decade, according to Airbus officials.

The Ministry of Defence (MoD) on Thursday announced it had, for the first time, entrusted a private firm — Tata Advanced Systems (TASL) — to manufacture an entire aircraft for the military. On September 24, 2021, MoD had signed a Rs 21,935 crore contract with Airbus for 56 C-295 aircraft. Since they were to replace the Indian Air Force’s (IAF’s) legacy fleet of Avro HS-748 aircraft, this deal earned the sobriquet of ‘Avro replacement program’.

The ‘Avro replacement program’ will require TASL to develop an entire industrial ecosystem: from manufacture, assembly, testing, and qualification, to delivery and maintenance over the aircraft’s lifecycle. The IAF will be the 35th operator of the C-295 worldwide. Airbus already has orders for 278 of these aircraft, of which more than 200 are already in operation.

Addressing a press conference in New Delhi on Thursday, Defence Secretary Ajay Kumar said, under the terms of the contract, Airbus would build the first 16 aircraft on its final assembly line in Seville (Spain) and deliver them to the IAF in ‘fly-away condition.

The subsequent 40 aircraft are to be manufactured in India by the Indian Aircraft Contractor — a Tata consortium consisting of TASL and Tata Consultancy Services, led by TASL. The first 16 fly-away aircraft are scheduled to be received by the IAF between September 2023 and August 2025. The first Made-in-India aircraft is expected from September 2026.

In March, the MoD signed an offset contract with Airbus Defence and Space through which Airbus will discharge its offset obligations through direct purchase of eligible products and services from Indian Offset Partners, stated the MoD in a press release.

The MoD announced on Thursday that 96 percent of the total man-hour work per aircraft that Airbus employs at its manufacturing facility at Spain would be undertaken in India by the Tata consortium. This will involve manufacturing in India of over 13,400 detailed parts, 4,600 sub-assemblies, and all seven major component assemblies, along with tools, jigs, and testers.

After the completion of the delivery of 56 aircraft to IAF, Airbus Defence and Space will be allowed to sell the aircraft manufactured in India to civil operators and export to countries that are cleared by the Government of India.

The IAF Vice Chief, Air Marshal Sandeep Singh, stated that the C-295 surpasses the performance of the two medium transport aircraft that the IAF currently operates: the Avro and the Antonov-32. A decision on replacing the ageing AN-32 would be taken after five years, he said.

The C-295 is the first major win in India for Airbus Defence. There could be more ahead, including the naval utility helicopter tender, in which it is offering the H135M and AS565 Panther. Airbus is also participating in the IAF’s acquisition of airborne refueling tankers, for which it has fielded the A330 MRTT.