India, Oct. 28 -- Hindustan Aeronautics Ltd. plans to manufacture Russia's SJ-100 aircraft in India to boost short-haul flights in the world's fastest growing civil aviation market of its size.

The Indian company has signed an agreement with Russia's United Aircraft Corp. PJSC to manufacture the commuter aircraft from the ground-up-a first for the local civil-aviation industry, according to an exchange filing Tuesday. The last time India built a complete passenger aircraft was the AVRO HS-748 between 1961 and 1988. That too was an HAL project.

"The manufacturing of the SJ-100 aircraft marks the beginning of a new chapter in the history of the Indian aviation industry," HAL said in the filing. "It's a step towards fulfilling the dream of...