India and Russia have begun work on their multi-role transport aircraft (MTA) programme after several rounds of negotiations between officials from both countries.
Hindustan Aeronautics, India's state-owned airframer, has signed an agreement with Russian arms export agency Rosoboronexport and United Aircraft to form a Bangalore-based joint venture for the programme, paving the way for the companies to begin preliminary design work.
"The MTA is a 15-20t payload capacity aircraft which would meet the requirement of the Indian air force and the Russian air force," says HAL. "The project has been approved by both the government of India and the government of the Russian Federation."
Around $600 million will be spent on the aircraft's development, with India and Russia to share the investment equally and HAL and UAC to have a 50:50 stake in the workshare.
The companies plan to manufacture 205 of the aircraft, which will have a cruise speed of 430kt (800km/h), a range of up to 1,460nm (2,700km) and a service ceiling of 39,400ft (12,000m).
The twin-engine MTA will have "state of the art features such as fly-by-wire, full authority digital engine control, modern avionics and glass cockpit", says HAL.
Agreement to proceed with the military transport is expected to be the first of two major agreements this year between Russia and India, which have had a decades-long defence relationship.
Industry sources say they could also sign an agreement on their multi-billion dollar fifth-generation fighter aircraft programme. This aims to develop a twin-seat aircraft based on Sukhoi's single-seat PAK FA prototype, which had its first flight in January.
Russia's willingness to transfer technology to India was for a long a bugbear in the negotiations for both the MTA and fifth-generation fighter programme. However, officials say there has been a lot of progress by Moscow over the last few months to alleviate New Delhi's concerns.
While India has long been a good customer for Russia, it has been diversifying its equipment sources in recent years and has turned to the West for many of its recent military acquisitions.
Over the past two years, New Delhi has confirmed orders for the Lockheed Martin C-130J tactical transport and the Boeing P-8I Poseidon maritime patrol aircraft. It is also close to finalising a deal for Boeing C-17 strategic transports.
The Indian air force is also considering Russian, European and US fighters for its multi-role combat aircraft programme.
Trials have concluded for the $10-12 billion competition, and New Delhi is expected to issue a shortlist in the near future. The contenders for the 126-aircraft requirement are the Boeing F/A-18E/F Super Hornet, Dassault Rafale, Eurofighter Typhoon, Lockheed Martin F-16, RSK MiG-35 and Saab Gripen NG.