The 15-20 tonne MTA are intended for use by the Indian Air Force (IAF) and Russian Air Force (RAF) and others.
State-run HAL signed a tripartite general contract with UAC and their joint venture, Multirole Transport Aircraft Limited, for the project this week.
HAL will carry out the design and development of the MTA at the Aircraft R&D Centre at Bangalore. Its Transport Aircraft Division in Kanpur will manufacture the prototypes, to be followed by serial production.
HAL’s other R&D centres and manufacturing divisions will share the development of systems, manufacture of components, sub-assemblies and composite structure.
The Indian and Russian governments had signed an inter-governmental agreement for the joint design, development and production of the MTA on a 50-50 sharing basis back in September 2010.
The primary objective of the agreement is to achieve self-reliance in the design and production of aircraft of this size.
The new JV will also work with Russia's aerospace major Rosoboronexport to co-develop the aircraft.
HAL has confirmed that the aircraft will be designed for cargo and troop transportation and air-drop of supplies to include a low-altitude parachute extraction system.
The company foresees a total requirement of 205 such aircraft, of which 100 will be for the RAF, 45 for IAF and 60 for “third countries”.
The MTA is expected to have a high-wing design with two turbofan engines.
Russia and India are also collaborating on the development of India's Fifth Generation Fighter Aircraft (FGFA), a design based on the developmental Sukhoi PAK FA.