The requirement, which is part of Prime Minister Narendra Modi's "Make in India" initiative, is believed to have been a roadblock in India's most recent military aircraft deal with France.
That deal, which originally called for French company Dassault to supply the Indian air force with 126 Rafale fighters, underwent lengthy negotiations due to disputes over the local production clause.
Under the final terms of the sale agreed by India and France last month, India will only get 36 jets. But India wants 150 jets.
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