ATR says it has reached a preliminary agreement with India’s Indigo for the sale of up to 50 ATR 72-600 aircraft. If finalized, the deal would be worth over $1.3bn at list prices. First deliveries are expected by the end of 2017.

Indigo — India’s largest airline in terms of market share —is currently gearing up for an ambitious development of its regional footprint. The carrier currently operates an all-A320ceo/neo fleet of 133 aircraft.

The ATR announcement coincides with the launch of the Indian government’s Regional Connectivity Scheme called UDAN, which aims to boost economic development, employment and tourism by connecting small and remote cities.

India’s rapidly expanding domestic market represented close to 100 million passengers in 2016, and has been growing by more than 20% annually. It is expected to become the world’s third largest market by 2020. Under the Regional Connectivity Scheme, 100 new airports will be created within the next two to three years, and airlines will receive financial support and other incentives to make air travel affordable.

Around 40 ATR aircraft are currently in service with Indian carriers.