Global aerospace companies Embraer of Brazil and Lockheed Martin of the United States are offering to expand aircraft manufacturing facilities in India as they compete for an approximately $10.5 billion Indian Air Force contract. The planned purchase covers 60 medium transport aircraft.

The contest pits Embraer’s C-390 Millennium against Lockheed Martin’s C-130J Super Hercules as India moves to replace an aging military transport fleet that includes the Antonov An-32 from the Soviet era. The deal ranks among India’s biggest military aviation contracts.

The formal race began in August, when India issued a Request for Proposal to five Indian companies and opened the bidding process. Global aviation manufacturers are partnering with Indian firms because New Delhi requires the initial multirole aircraft to arrive ready to fly while the remaining aircraft must be built domestically.

India’s emphasis on building local aerospace capacity has pushed the potential production footprint to the center of the competition. On Oct. 1, Embraer and its Indian partner, Mahindra Defence, identified Nagpur in central India as a production site if their bid succeeds.

“Identifying Nagpur as a potential location for an assembly facility is an important step in building a robust, long-term aerospace ecosystem in the country,” said Bosco da Costa Junior, president and CEO of Embraer Defense & Security, in a joint statement with Mahindra.

Embraer and Mahindra said their plan would progressively bring Indian aerospace companies into the C-390 Millennium ecosystem. The proposed work would encompass manufacturing, training and lifecycle support tied to the aircraft.

Lockheed Martin enters the contest with an established presence in India and an aircraft already operated by the Indian Air Force. The service currently fields 12 C-130J Super Hercules aircraft, while Lockheed says its offered C-130J-30 in the Block 8.1.2 configuration is more advanced than those currently in service.

Under Lockheed’s proposal, 12 aircraft would be built in the United States and 48 would be produced in India if the company wins. Indian production would be carried out with Tata Advanced Systems Limited, Lockheed’s partner in an existing joint venture.

The American company already maintains manufacturing operations in India with Tata. Those operations produce key C-130J components locally, including the empennage, or tail assembly, giving Lockheed an existing base that it says would grow if it secured the contract.

Dan Tenney, Lockheed Martin’s senior vice president for global business development and strategy, recently told the Press Trust of India that victory would bring a larger industrial presence in the country. His comments placed the company’s existing relationship with Tata at the heart of its pitch.

“We have a long partnership with Tata that produces components and empennages of the C-130J aircraft. It is a very robust capability that will be expanded in our current bid,” he said.

Lockheed has also proposed upgrades for the Indian Air Force’s current fleet of 12 C-130Js. That element adds work on aircraft already operating in India to the company’s plan for producing the new fleet.

India has established a minimum domestic content requirement of 40% for the aircraft. New Delhi also requires most of the fleet to be produced inside the country rather than delivered ready to fly from overseas.

Operational demands are central to the solicitation because India shares long Himalayan borders with Pakistan and China. The aircraft must operate at high altitude locations and from temporary or unpaved strips while carrying troops, vehicles and ammunition.

India also uses military transport aircraft for disaster relief and humanitarian assistance. The bids are due by early December, and the proposals will then proceed through technical evaluation.

The procurement comes amid a government push that has lasted two decades for greater local production and technology transfer. Through the aviation contract, the government wants to deepen India’s defense manufacturing footprint, placing domestic industry at the center of the competition.