An Indian defense ministry official says the country's cabinet has approved a proposal to buy 10 American C-17 military aircraft for more than $4 billion, the largest defense deal between the two nations.

The official, who could not be named because he wasn't authorized to discuss the subject, said the deal requires the aircraft maker, Boeing Co., to invest 30 percent of the $4 billion in defense-related industries in India.

The news comes after Boeing and another American defense manufacturer, Lockheed Martin, were rejected for a multibillion-dollar contract to supply fighter jets to the Indian air force.

India is expected to spend $80 billion over the next decade to upgrade its military.

The agreement still must be signed by both countries.