The agreement to build the multirole jet aircraft was signed this week by the representatives of HAL, UAC-TC and Multirole Transport Aircraft Ltd, their joint venture company with Russia's Rosoboronexport.
The governments of India and Russia had earlier signed an Inter-Governmental Agreement for the joint design, development and production of the MTA on an equal share basis.
The aircraft will be in the 15-20 ton range. The plane would be used for cargo transport, troop transport and for the parachute drop of supplies. The aircraft would also include a low-altitude parachute extraction system, the companies said.
HAL said the primary objective of the program is to achieve self-reliance in the design, development and production of 15-20 ton aircraft with global suppliers and also to manage it with international collaboration.
The program is looking to produce 205 planes. A total of 100 would be for the Russian air force, while 45 would be destined for the Indian air force. The remaining 60 aircraft would be sold to international customers, HAL said.
HAL, a major player in the Indian aerospace industry, has been manufacturing transport aircraft for a number of years, including Avros HS-748s and Dornier Do-228s.
A total of 89 Avros turboprop aircraft were manufactured by the company until 1984. HAL also completed upgrades on the aircraft and is maintaining those still flying in the country.
HAL has also manufactured 116 Dorniers to date. The aircraft are being maintained by the company's Kanpur division.
Two Do-228 maritime aircraft have been exported to Mauritius by HAL, which is now manufacturing structural assemblies for Do-228s for Ruag Aerospace of Germany.
HAL said as part of its deal with the Russians it will develop aircraft systems, components, sub-assemblies and composite structure.
The work will be conducted by HAL teams in Russia as well as in India.
In other aviation developments, Irkut of Russia expects to receive new orders this year for the Yakovlev Yak-130 advanced jet trainer and light-attack aircraft.
Russia's Ministry of Defense signed last year a production order for 55 of the twin-engine aircraft in a trainer/armed combat trainer mix.
The first Yakovlev Yak-130 export variants were exported last year to Algeria, which had signed a contract for 16 of the aircraft.
"At the moment we are conducting pretty intensive talks and negotiations with more than 10 potential customers, and I believe that in the near future we are going to sign new export contracts," said Irkut President Alexey Fedorov.
No information was provided as to which countries are involved in the discussions.