NEW DELHI, May 27 (Reuters) - India's defence minister

has approved a framework for building the country's most

advanced stealth fighter jet, the defence ministry said on

Tuesday, amid a new arms race with Pakistan weeks after a

military conflict between the neighbours.

Indian state-run Aeronautical Development Agency, which is

executing the programme, will shortly invite initial interest

from defence firms for developing a prototype of the warplane,

envisaged as a twin-engine 5th generation fighter, the ministry

said.

The project is crucial for the Indian Air Force, whose

squadrons of mainly Russian and ex-Soviet aircraft have fallen

to 31 from an approved strength of 42 at a time when rival China

is expanding its air force rapidly. Pakistan has one of China's

most advanced warplanes, the J-10, in its arsenal.

Militaries of nuclear-armed neighbours India and Pakistan

faced-off in four days of fighting this month, which saw use of

fighter jets, missiles, drones and artillery by both sides

before a ceasefire was announced by U.S. President Donald Trump.

It was the first time both sides utilised drones at scale

and the South Asian powers are now locked in a drones arms race,

according to Reuters' interviews with 15 people, including

security officials, industry executives and analysts in the two

countries.

India will partner with a domestic firm for the stealth

fighter programme, and companies can bid independently or as a

joint venture, the defence ministry said in a statement, adding

that the bids would be open for both private and state-owned

firms.

In March, an Indian defence committee had recommended

including the private sector in military aircraft manufacturing

to shore up the capabilities of the Indian Air Force and reduce

the burden on state-owned Hindustan Aeronautics Ltd,

which makes most of India's military aircraft.

Air Chief Marshal Amar Preet Singh has previously criticised

Hindustan Aeronautics for slow delivery of light combat Tejas

aircraft, a 4.5 generation fighter, which the firm blamed on

slow delivery of engines from General Electric ( GE ) due to

supply chain issues faced by the U.S. firm.