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The biggest military order placed on the private sector - a deal to manufacture new transport aircraft for the air force - is set to be signed on Thursday, with the location for the manufacturing plant now being finalised. The Rs 22,000-crore deal is part of a series of initiatives to promote the private sector in defence manufacturing.

Sources said that the deal with Tata - Airbus is likely to be signed on Thursday, two weeks after it was given a go ahead by the Cabinet Committee on Security. The signing is likely to include top officials from Tata and Airbus besides the ministry of defence.

A decision on where to set up the plant - 40 of the 56 C 295 transport aircraft ordered are to be built locally - is now being finalised. While locations around Hyderabad and Bengaluru are under consideration, other places under consideration could include Gujarat and Uttar Pradesh.