"The deal for Apache and Chinook (helicopters) has been cleared," government sources said. The CCS met after a Cabinet meeting, they added. Many in the defence sector had expected the deal, valued to be over USD 2.5 billion and pending since 2013 following finalisation of cost negotiations, to be signed during the visit of US Defence Secretary Ashton Carter in June this year.

The deal for Apache is 'a hybrid one', with one contract to be signed with Boeing for the helicopter and the other with the US government for its weapons, radars and electronic warfare suites. The US has been pushing for this contract as it will further bolster American presence in the burgeoning defence market of India.

American companies have over the last decade bagged defence contracts from India worth around USD 10 billion, including for aircraft like P-8I maritime surveillance planes, C-130J 'Super Hercules' and C-17 Globemaster-III in the transport category. Prime Minister Narendra Modi will leave for the US tomorrow to attend the UN General Assembly. The helicopter deal had survived over 10 price extensions from the American side with the last one being for a month as desired by India.

The contract will have clauses to place follow-on orders for 11 more Apaches and four extra Chinooks. Both platforms, which have been in combat in Afghanistan and Iraq, had beaten off competition from Russia, which had offered its Mi-28N Night Hunter and Mi-26 heavy-lift copters.

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