India signs deal with US to procure 10 C-17 aircraft

New Delhi, Jun 16: India has signed its biggest defence deal with the US to procure ten C-17 heavy-lift aircraft for USD 4.1 billion under which American defence major Boeing will set up test facilities for hi-tech aeronautics engines for the DRDO.

The project to procure the ten strategic heavy-lift aircraft was cleared by the Cabinet Committee on Security last week through the Foreign Military Sales route.

"India yesterday signed the letter for offer and acceptance with the US for 10 C-17s and associated equipment at a cost of USD 4.1 billion and the aircraft delivery would be done in 2013 and 2014," Defence Ministry officials said here.

Commenting on the development, Boeing's India head Dinesh Keskar said, "With its strategic capabilities, the C-17 fulfills India's needs for military and humanitarian airlift.

"The important transaction reaffirms our close relationship of several decades with India and also highlights our commitment to the strategic partnership between the two countries."

As per the agreement, the US defence major will invest 30 per cent of the contract amount for setting up defence facilities in India, officials said.

The procurement involves offsets clause, under which a vendor bagging a defence deal worth over Rs 300 crore has to reinvest at least 30 per cent of the deal amount in Indian defence, homeland security or civilian aerospace sectors.

Under the offsets, Boeing will establish a High Altitude Engine Test Facility at DRDO, which will allow the research organisation to test engines indigenously, officials said.

PTI