India’s largest conglomerate Tata and Airbus made an agreement to manufacture the C-295 transport aircraft in the country, the government announced on Thursday. It will be the first such production by a local private company as part of the Indian government’s push for an expansion of defense manufacturing. India, one of the world’s largest arms importers, has been scrambling to increase domestic output in order to reduce reliance on imports. Only state-owned Hindustan Aeronautics currently makes aircraft in India, mainly for the armed forces.

Prime Minister Modi will lay the foundation stone of the new aircraft manufacturing project in the state of Gujarat on Sunday.

“This is the first project of its kind in which a military aircraft will be manufactured in India by a private company,” the Ministry of Defense said in a statement.

The project will be worth 219.35 billion rupees ($2.66 billion) and involves the supply of 56 C-295 MW transport aircraft for the Indian Air Force.

Under the deal, Airbus will deliver 16 aircraft in flyaway condition between September next year and August 2025, while the rest will be made by Tata.

The first made-in-India aircraft is expected from September 2026, the ministry said.

“The project offers a unique opportunity for the Indian private sector to enter into the technology-intensive and highly competitive aviation industry,” the statement said. The ministry added that it will both reduce import dependency and increase exports.

Once delivery of the 56 aircraft is completed, Airbus will be able to sell the India-made planes to civil operators and export to countries cleared by the Government of India.