HAL-UAC Joint Venture To Build Military Transport Planes

India and Russia on Thursday agreed to set up a joint venture to manufacture a military transport plane.

Under the deal, each party will pay $300.35 million to the JV's charter capital.

Hindustan Aeronautics Ltd (HAL) and United Aircraft Building Company expected to sign a deal in March during Prime Minister Vladimir Putin's visit to New Delhi, but India failed to get the paperwork ready and the signing was delayed.

Manufacturing facilities will be set up both in Russia and in India. A total of 205 planes are to be made, 30% of which may be exported to third countries.

Russia and India signed an intergovernmental agreement on the joint development and manufacturing of the Medium Transport Aircraft (MTA) in 2007.

The first MTA is expected to make its maiden flight in 2016-18.

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