The defence ministry on Friday inked a nearly Rs 20,000-crore deal with the European aerospace manufacturer Airbus Defence and Space of Spain for the procurement of 56 C-295 medium transport aircraft.

Airbus Defence and Space and Tata Advanced Systems Ltd will jointly execute the project to equip the force with the transport aircraft under the Make in India initiative in the aerospace sector.

This is the first project in which a military aircraft will be manufactured in India by a private company.

Airbus will supply the first 16 aircraft in flyaway condition from Spain within 48 months of signing the contract. The remaining 40 will be manufactured in India by the Tatas within 10 years of signing the contract.

The C-295MW aircraft is a transport plane of 5-10 tonnes capacity with contemporary technology that will replace the ageing Avro fleet of the IAF. The C-295MW has a rear ramp door for quick reaction and para-dropping of troops and cargo.

The contract was signed on Friday, two weeks after it was cleared by the Prime Minister-led cabinet committee on security.