India, one of the world's largest arms importers, has made the modernisation of its forces a top priority in the face of tensions with nuclear-armed Pakistan and China.
Defence Minister Rajnath Singh approved the prototype of a 5th generation Advanced Medium Combat Aircraft (AMCA), the ministry said in a statement, calling it a "significant push towards enhancing India's indigenous defence capabilities".
India's Aeronautical Development Agency (ADA) -- a government agency under the Ministry of Defence responsible for aircraft design -- is "set to execute the programme through industry partnership", it added.
"This is an important step...which will be a major milestone towards aatmanirbharta ("self-reliance") in the aerospace sector".
India's arms purchases have steadily risen to account for nearly 10 percent of all imports globally in 2019-23, the Stockholm International Peace Research Institute (SIPRI) said last year.
The world's most populous nation has deepened defence cooperation with Western countries in recent years, including the Quad alliance with the United States, Japan and Australia, as it slowly shifts away from its longstanding reliance on Russian military hardware.
India signed in April a multi-billion-dollar deal to purchase 26 Rafale fighter jets from France's Dassault Aviation, adding to 36 already acquired, and replacing Russian MiG-29K jets.
But Singh has also promised at least $100 billion in fresh domestic military hardware contracts by 2033 to spur local arms production.
- Warships, missiles, planes -
This decade India has opened an expansive new helicopter factory, launched its first homemade aircraft carrier, warships and submarines, and conducted a successful long-range hypersonic missile test.
New Delhi eyes threats from multiple nations, especially Islamabad.
India and Pakistan were engaged in a four-day conflict this month, their worst standoff since 1999, before a ceasefire was agreed on May 10.
More than 70 people were killed in missile, drone and artillery fire on both sides.
Pakistan claimed its Chinese-supplied jets had shot down six Indian aircraft -- including three French-made Rafale fighters.
India has not officially confirmed any of its aircraft were lost, although a senior security source told AFP three jets had crashed on home soil without giving the make or cause.
The fighting was triggered by an April 22 attack on tourists in Indian-administered Kashmir that New Delhi accused Islamabad of backing -- a charge Pakistan denies.
India is also wary of northern neighbour China, especially since a deadly 2020 clash between their troops.
pjm/abh/tc
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