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The government is in early talks with top global helicopter makers and their Japanese partners on a deal worth around $2 billion to build transport aircraft for the Self-Defense Forces and for sale overseas, sources said.

The talks, which began in earnest over the past two months, represent another milestone in Prime Minister Shinzo Abe’s bid to nurture a domestic weapons export industry that would also bring down Japan’s defense procurement costs at a time of rising tensions between Tokyo and an increasingly assertive China.

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