Japan's ShinMaywa Industries has offered to set up a plant in India for US-2 amphibious aircraft to cater to international demands, according to PTI report.
The move comes as the Indian Navy plans to procure six such aircraft, under a government to government deal, between 2017 and 2022. Six are proposed to be bought in the next phase.
"The deal when inked will have a 30 per cent offset clause. Under this offset clause, ShinMaywa wants to set up a plant in India to cater to the global market since the demand for the aircraft is high," the defence sources were quoted as saying in the report.
Sources said the deal could be a "government to government" exercise with the initial purchase being off the shelf.
If the deal goes through, it would be the first major export of Japanese defence item after it lifted decades-long self-imposed embargo on export of weapons.
The aircraft, which can land on choppy waters and have long-range civilian and military applications, are being sought by the Navy to monitor India's vast coastline, islands and for the use in disaster relief. Japanese military currently operates seven of these aircraft as Search and Rescue Amphibians.
A ShinMaywa representative said it has not tied up with any Indian firm for the project but has been in talks with several of them since 2011.
The report also adds that the Indian Navy is focusing on the next priority project called the P-75 India, under which it plans to build six more conventional submarines, in addition to building six nuclear-powered submarines for which the Cabinet Committee on Security had given the go ahead last February.
"P75I and nuclear submarines are the main focus right now besides the development of next indigenous aircraft carrier," sources added.