SOURCE: AFI
As India strives to bolster its air power amid rising regional tensions and an evolving global security landscape, the production of fighter aircraft remains a critical pillar of its defense strategy. In a recent issue brief published by the Centre for Air Power Studies (CAPS), Air Commodore SP Singh, VSM (Retd), a Senior Visiting Fellow, argues that the time has come for India to pivot toward privatisation to accelerate and enhance its fighter jet manufacturing capabilities. Titled “Fighter Aircraft Production in India: Privatisation is the Need of Hour,” the piece underscores the limitations of the current state-dominated system and calls for a transformative role for the private sector.
India’s fighter aircraft production has long been anchored by Hindustan Aeronautics Limited (HAL), a public sector undertaking (PSU) that has delivered aircraft like the MiG series, Jaguar, Su-30 MKI, and the indigenous Light Combat Aircraft (LCA) Tejas. While HAL has been instrumental in building India’s aerospace foundation, its track record is marred by delays, cost overruns, and an inability to meet the Indian Air Force’s (IAF) growing demands. With the IAF’s squadron strength languishing at 31 against a sanctioned 42, and older platforms like the MiG-21 nearing retirement, the urgency to ramp up production is palpable.
Singh’s brief highlights that HAL’s monopoly has stifled innovation and scalability. The LCA Tejas program, despite being a symbol of indigenous achievement, has faced protracted delays—over three decades from inception to operational deployment. The Tejas Mk-1A, intended to bridge critical gaps, has been hampered by slow delivery schedules, with HAL struggling to meet the IAF’s order of 83 aircraft, let alone the additional 97 recently contracted. Engine supply issues from General Electric and HAL’s overburdened production lines have only compounded the problem.
This is where privatisation enters the frame. Singh argues that involving private industry could inject efficiency, competition, and innovation into fighter aircraft production. India’s private sector has already shown its mettle in ancillary roles—firms like Tata, Larsen & Toubro, and Godrej have contributed components to HAL’s projects. However, their involvement remains peripheral, with HAL retaining control over integration and final assembly. A shift toward a model where private companies lead production, potentially in partnership with HAL or foreign Original Equipment Manufacturers (OEMs), could unlock significant potential.
The global fighter jet market offers a compelling case for this shift. Countries like the United States and France rely heavily on private giants—Lockheed Martin, Boeing, and Dassault—to deliver cutting-edge aircraft on time and within budget. In contrast, India’s state-led approach has struggled to keep pace with modern warfare’s demands, particularly as adversaries like China roll out fifth-generation fighters like the J-20. Privatisation could not only expedite production but also position India to tap into export markets, a critical step for recovering the massive investments required in aerospace R&D.
Singh points to the Strategic Partnership (SP) Model, introduced in the 2017 Defence Procurement Procedure, as a framework ripe for expansion. This model encourages collaboration between private Indian firms and foreign OEMs, fostering technology transfer and local manufacturing. The Tata-Airbus C-295 assembly line in Vadodara is a nascent example of what’s possible. Extending this to fighter jets—be it the Tejas variants, the Advanced Medium Combat Aircraft (AMCA), or even the Multi-Role Fighter Aircraft (MRFA) acquisition—could diversify production and reduce HAL’s burden.
Yet, challenges abound. Fighter jet production demands staggering capital—estimates peg the cost of setting up a new line at $1-2 billion, excluding R&D. Private firms, unlike PSUs, lack the government’s financial safety net and require assured orders and export viability to justify such investments. India’s reliance on imported engines, such as the GE F404 and F414, further complicates matters, as foreign dependencies limit export flexibility and inflate costs. Singh stresses the need for a fully localized supply chain, including an indigenous engine—a goal the Gas Turbine Research Establishment (GTRE) has yet to achieve despite decades of effort.
The strategic and economic benefits of privatisation are hard to ignore. A robust private-led aerospace sector could create high-skill jobs, boost ancillary industries, and save billions in import costs—potentially $9-13 billion over 20 years for 1,100 engines needed across LCA, AMCA, and other programs. Exporting jets like the Tejas, unencumbered by foreign restrictions, could yield $10-15 billion in revenue, enhancing India’s geopolitical clout by arming allies.
Singh’s call aligns with recent government moves. A high-level Defence Ministry committee, led by Defence Secretary Rajesh Kumar Singh, has recommended greater private sector involvement in the AMCA project, signaling a policy shift. Posts on X echo this sentiment, with users advocating for private firms to take the lead in future programs, arguing that HAL should not remain the default manufacturer by inertia.
Critics, however, caution against over-reliance on private players. HAL’s decades of experience and infrastructure are not easily replicated, and private firms may prioritize profit over national security imperatives. The transition would require careful calibration—subsidies, assured contracts, and a clear roadmap to avoid disrupting ongoing programs.
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