The Defence Acquisition Council (DAC), chaired by Defence Minster Manohar Parrikar, also reviewed the working of the DRDO besides giving the go ahead for the procurement of 1,500 indigenously designed and developed Nuclear Biological and Chemical (NBC) warfare protection system for the infantry combat vehicle for Rs 1,265 crore.
Another proposal of the army and the IAF for the procurement of 55 low level light weight radar was also cleared by the DAC for Rs 419 crore.
The aircraft likely to be shortlisted for the Coast Guard is the C295, which is already been negotiated as a replacement for the Avro transport fleet of the air force.
Asked why the IAF is purchasing just one additional C17 aircraft besides the already 10 in possession, sources said this is because that was the only lone aircraft available with Boeing.
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The IAF seems to have taken too long to push through the original proposal to buy three new C-17 aircraft. The American manufacturer had already pledged four of the last five C-17s in its production line to Qatar.
Talking about the NBC system, sources said the infantry combat vehicles are currently fitted with a manual system and the news ones will be automatic.
Sources said the six aircraft to be purchased by the Coast Guard will be fitted with state of the art "mission suite", designed and developed by the DRDO.