The deal, worth 500 million sterling for BAE systems and up to 200 million sterling for Rolls-Royce, will boost British defence firms looking to break into the huge Indian defence market.
BAE Systems and Rolls-Royce will supply India with 57 Hawk military training jets in a deal worth around 700 million sterling ($1.09 billion), British prime minister David Cameron said on Wednesday.
The deal, worth 500 million sterling for BAE systems and up to 200 million sterling for Rolls-Royce, will boost British defence firms looking to break into the huge Indian defence market mostly controlled by Russian, US and Israeli companies.
New Delhi plans to spend $100 billion over the next decade to overhaul its Soviet-era defence system.
BAE, the biggest defence contractor in Europe, will supply 40 trainer jets to the Indian Air Force and the remainder to the navy under the new agreement, an air force official told Reuters.
"This is an outstanding example of India-UK defence and industrial partnership, and this agreement will bring significant economic benefits to both our countries," Cameron said in a statement in Bangalore where he kicked off a visit aimed at boosting business ties with the rising Asian power.
"It is evidence of our new, commercial foreign policy in action," he said, following the signing of the agreement between BAE Systems, Rolls-Royce and India's state-run Hindustan Aeronautics Ltd.
The jet trainers, fitted with engines made by Rolls-Royce, will help Indian pilots fly new generation fighter jets, the Indian air force official said.
The latest agreement is a follow-on deal after India ordered 66 such jet trainers from BAE Systems in 2004. India says it needs at least 180 training jets over the next few years.
New Delhi separately began field trials last August to buy 126 fighter jets in a $11-billion deal to modernise its air force.
Lockheed Martin's F-16 is competing with Boeing's FA-18 Super Hornet, France's Dassault Rafale, Russia's MiG-35, Sweden's Saab JAS-39 Gripen and the Eurofighter Typhoon, produced by a consortium, for securing the deal.
Cameron, who is on his first visit to India since taking office in May, leads a delegation including six ministers and more than 30 senior executives from top UK firms, to show that Britain is serious about boosting economic exchanges with India.
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