The Ministry of Defense's acquisition council gave the go-ahead to issue a global tender to procure the aircraft, of which the first 16 will be bought off the shelf likely from a foreign manufacturer, a Press Trust of India report said.
The remaining planes will have to be built in India through a partnership deal with indigenous aviation manufacturers, the PTI report said, quoting unnamed Ministry of Defense sources.
The next 16 aircraft will have to have 30 percent indigenous components while the remaining 24 planes will have 60 percent locally procured and produced items.
The source ruled out major Indian defense manufacturer Hindustan Aeronautics Limited from involvement because the company is stretching its resources with projects in hand.
The PTI report said that their source said HAL, a state-run public sector undertaking business, is "already burdened with projects, such as the SU-30MKI production and upgrades of Indian air force's aircraft fleet, including the Mirage, MiG 29 and Jaguar aircraft."
The ministry source gave no schedule for sending out a request for proposal or other deadlines.
However, two aircraft manufacturers -- Airbus Military with its C295 and Alenia Aermacchi with the C-27J -- are expected to be the front-runners for the contract, a report by Flight Global said.
Whichever foreign company wins, it will likely work with a private Indian company, which rules out HAL, and which would be a "major first" for India's aviation sector, Flight Global said.
The partnership element of the deal would help create India's first airframe manufacturer.
Some of India's biggest manufacturing businesses, including Larsen and Toubro, Mahindra and Mahindra and Tata, have been steadily building aerospace units in recent years, Flight Global said.
The first aircraft could be delivered within two years of a contract signing with 15 more delivered within a further 24 months. The remaining 40 would be delivered within six years, Flight Global said.
The Hawker Siddeley 748M Avro aircraft was built by the company's subsidiary Avro and first flew in 1960. It was designed as an airliner but adopted for military transport with a view to replace aircraft operators' aging DC-3 Dakotas.
India uses its Avros for communication, troop movements and training missions. Capacity is up to 8 tons.
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