Hindustan Aeronautics (HAL), India's sole military aircraft maker, is forming a 50:50 SPV with National Aerospace Laboratories (NAL) to design and develop a turboprop aircraft.

The company is forming an SPV with a paid-up capital of Rs 20 crore and authorised capital of Rs 30 crore, for developing this transport aircraft.

The HAL board has already given its approval for formation of the SPV, and the NAL board of directors are expected to give their approval by the end of April 2014.

The turboprop aircraft will have the capacity to carry 10-70 people. The aircraft project is likely to be completed by the year 2020, only if the required government approvals for R&D and development phases are granted in the current FY of 2014-15.

The total cost of the project is expected to be in the range of Rs 7,500 crore. The SPV is expected to be formed after the election of the new government.

Also, the formation of the SPV will require approval from the National Manufacturing Competitiveness Council (NMCC) which is studying the regional aircraft plan, and which will finalise the number of seats and the type of engine that will be used in the aircraft.