The US arms export agency has notified Congress that India could buy 10 Boeing C-17s in a deal valued at $5.8 billion.
The notice by the Defense Security Cooperation Agency (DSCA) is mandatory before the US can finalise a contract with the Indian government. However, it stops short of making a binding commitment to complete the transaction.
The $5.8 billion means the average cost per aircraft is nearly $600 million. But the value is a ceiling that includes the cost of the aircraft, spares, training, support and the fee DSCA charges to broker the deal.
If the contract is signed, India would become the single-largest of six international militaries to already buy the C-17. The UK, Australia, Canada, Qatar, the United Arab Emirates and the North Atlantic Treaty Organization have combined to buy 25 C-17s so far.
The deal also would help Boeing's four-year campaign to extend C-17 production through foreign sales and enlisting Congressional supporters to add unrequested aircraft to the US Air Force budget.
The USAF has purchased 223 C-17s in total, although it requested funding for only 180. The last 43 C-17s have been added to the budget by Congress. USAF officials have said that further C-17 purchases can only occur if the service is allowed to retire Lockheed Martin C-5As.
The Boeing production line is scheduled to shut down before 2013 in the absence of new contracts.