"We are setting up a greenfield facility near Tumakuru to manufacture LUHs in the three tonne class for which there is a huge potential demand in the domestic and international markets," HAL chairman T. Suvarna Raju told reporters here.
The Karnataka government had allocated 610 acres of land to the company near Tumakuru, about 80 km from Bengaluru, for setting up the plant.
Though Raju did not disclose the proposed investment in the new plant, the defence behemoth had spent about Rs.400 crore in the design and development of the LUH, whose prototypes will roll out by April 2017 for certification and operational clearance.
The new facility will have an installed capacity of 60 copters per year.
"We will also explore co-production opportunities with an overseas partner for exporting the chopper after meeting the domestic requirements," Raju said on the margins of the Aero India trade 2015 trade expo at Yelahanka base of the Indian Air Force (IAF) on the city's outskirts.
The aero engine for the LUC will be procured from French firm Snecma.
"There is a potential demand for about 500 helicopters of military and civil variant in the country over the next five years," Raju said on the occasion.
The defence ministry had projected a demand for about 400 LUHs to meet the requirements of the army and air force.