As agreed, Airbus will deliver the first 16 aircraft in ‘fly-away’ condition from its Spanish facility in Seville over four years.
The remaining 40 units will be manufactured and assembled in India by Tata Advanced Systems (TASL).
All deliveries are expected to be completed within ten years of signing the contract.
Airbus Defence and Space CEO Michael Schoellhorn said: “This contract will support the further development of India’s aerospace ecosystem, bringing investment and 15,000 skilled direct jobs and 10,000 indirect positions over the coming ten years.
“The C295 has proven again as the segment leader, and with the addition of India as a new operator, the type will enlarge its footprint even more, not only on the operational aspects but on its own industrial and technological development.”
Airbus C295 tactical transport aircraft will replace IAF’s ageing Avro fleet.
According to an Airbus statement, the C295 can be used for transporting up to 71 troops or 50 paratroopers. It can also be used for logistical operations to locations inaccessible by heavier aircraft.
Additionally, C295 can be used for maritime patrolling, airdropping paratroopers and loads, medical evacuation as well as disaster response duties.
Airbus also signed an offset contract with India’s Ministry of Defence (MoD) to directly purchase eligible products and services from Indian offset partners.
The procurement will boost IAF’s tactical airlift capability in the northern and north-eastern sector, and Andaman and Nicobar Islands. All 56 aircraft will be equipped with the local electronic warfare suite.
IAF will be the 35th C295 operator globally.
Earlier this year, the Egyptian Air Force (EAF) signed a contract for performance-based support for its C295 tactical airlifter fleet.