The deal has been signed on the sidelines of the Paris Air Show

Ahead of Prime MinisterNarendra Modi’s visit to the US on June 25, the Tata Group and military equipment manufacturer Lockheed Martin signed an agreement to build F-16 fighter planes in India.

Lockheed Martin’s F-16 and Saab’s Gripen fighter plane from Sweden are regarded as the front-runners in getting a lucrative, multi-billion dollar contract for 200 to 250 jets for the Indian Air Force.According to sources, the deal has been signed on the sidelines of the Paris Air Show.

The Modi government has said foreign suppliers would have to make the planes in India with a local partner to help build a domestic industrial base and cut outright imports. Lockheed and Tata said moving the production base to India would still retain jobs in the United States.

F-16 production in India supports thousands of Lockheed Martin and F-16 supplier jobs in the US, creates new manufacturing jobs in India, and positions Indian industry at the center of the most extensive fighter aircraft supply ecosystem in the world, a joint statement by the firms said.

India will also have the chance to export the F-16 that is flown by air forces around the world, the joint statement said. This unprecedented F-16 production partnership between the world’s largest defence contractor and India’s premier industrial house provides India the opportunity to produce, operate and export F-16 Block 70 aircraft, the newest and most advanced version of the world’s most successful, combat-proven multi-role fighter, the statement said.

In 2016, the Defence ministry requested foreign manufacturers if they were willing to produce a single-engine combat plane in India in collaboration with a local partner, as part of the government’s drive to build a domestic industrial base and reduce imports.

Prime Minister Modi will be on a two-day visit to the U.S. on June 25-26.