SOURCE: RAUNAK KUNDE / NEWS BEAT / IDRW.ORG
In a significant shift in India’s defense manufacturing landscape, Hindustan Aeronautics Limited (HAL) will compete with private sector giants Larsen & Toubro (L&T) and Tata Advanced Systems Limited (TASL) for the production contract of the Advanced Medium Combat Aircraft (AMCA), India’s ambitious fifth-generation stealth fighter program.
While HAL remains the frontrunner due to its extensive experience in aerospace manufacturing, its existing commitments to programs like the Tejas Mk1A, Tejas Mk2, Su-30 MKI upgrades, and the HLFT-42 Lead-in Fighter Trainer (LIFT) alongside the HJT-36 Yashas could open the door for private firms to play a larger role in AMCA production. The Ministry of Defence’s decision to invite competitive bids marks a departure from tradition, signaling a push for greater private sector involvement to meet India’s pressing defense needs.
The AMCA, designed by the Aeronautical Development Agency (ADA) under the Ministry of Defence, is envisioned as a single-seat, twin-engine, all-weather fifth-generation stealth fighter optimized for air supremacy, ground-strike, suppression of enemy air defenses (SEAD), and electronic warfare (EW) missions. With a planned production of 126 aircraft starting in 2035, the AMCA aims to replace the Indian Air Force’s (IAF) aging Sukhoi Su-30 MKI fleet and bolster India’s strategic deterrence against regional rivals like China and Pakistan. The program, valued at approximately ?15,000 crore for its prototype phase, features advanced technologies such as low radar cross-section, supercruise capability, and AI-driven avionics, making it a cornerstone of India’s self-reliance (Aatmanirbhar Bharat) initiative in defense.
On May 27, 2025, Defence Minister Rajnath Singh approved an execution model that mandates competitive bidding for the AMCA prototype and production contracts, breaking from the convention where HAL was the default manufacturer for combat aircraft. The model allows Indian companies, including HAL, L&T, TASL, and others like the Adani Group and Kalyani Group, to bid independently or as joint ventures (JVs) or consortia. This move aims to foster competition, enhance efficiency, and leverage private sector capabilities to meet tight timelines, with the first prototype rollout targeted for 2031 and induction by 2034.
HAL, with its decades-long experience in manufacturing aircraft like the Tejas, Su-30 MKI, and ALH Dhruv, is considered the frontrunner for the AMCA contract. Its Nashik facility, which has produced over 200 Su-30 MKI jets under a Russian licensing agreement, is poised to become a hub for AMCA production, potentially alongside the Tejas Mk1A . HAL’s established infrastructure, workforce, and expertise in systems integration give it a competitive edge. Additionally, HAL has already begun cutting metal for AMCA prototypes as early as 2022, positioning it ahead in terms of program familiarity.
However, HAL’s production constraints are a significant concern. The company is grappling with delays in delivering the Tejas Mk1A, with none of the 83 ordered aircraft delivered by the promised March 2024 deadline, primarily due to supply chain issues with General Electric’s F404-IN20 engines. HAL has also committed to producing an additional 97 Tejas Mk1A jets, 120 Tejas Mk2 aircraft, and over 100 Su-30 MKI upgrades under the Super-30 program, alongside 156 Prachand Light Combat Helicopters (LCH). Furthermore, HAL is developing the HLFT-42, a next-generation supersonic trainer inspired by the HF-24 Marut, and addressing setbacks with the HJT-36 Yashas, which faced decades-long delays due to stall and spin recovery issues. These commitments have stretched HAL’s production capacity, raising doubts about its ability to handle the AMCA program without significant private sector support.
At Aero India 2025, IAF Chief Air Chief Marshal AP Singh publicly expressed frustration with HAL’s delays, particularly for the Tejas Mk1A, stating, “I have no confidence in HAL,” after being promised 11 aircraft by February 2025, none of which were delivered. This sentiment underscores the IAF’s urgency to diversify production lines to meet its depleting squadron strength, currently at 31 squadrons against a sanctioned 42.
The Ministry of Defence’s competitive bidding model opens the door for private players like L&T and TASL, both of which have made significant strides in defense manufacturing. L&T has experience in supplying critical components for defense programs and has partnered with global firms like MBDA for missile systems. TASL, part of the Tata Group, has collaborated with Airbus to manufacture C295 military transport aircraft in India and has expertise in aerospace structures and systems integration. Both companies are seen as strong contenders, either independently or as part of a consortium, to secure a significant share of the AMCA program.
A proposed joint venture model, where HAL holds a 50% stake and four private firms each hold 12.5%, has been floated to distribute work packages, including design finalization, raw material procurement, component manufacturing, and ground support equipment development. This structure aims to leverage private sector efficiency while retaining HAL’s leadership. However, some experts argue that HAL’s dominant role in the JV could stifle private sector innovation, with critics suggesting that private firms should lead to avoid HAL’s “not-so-great delivery track-record.”
The private sector’s involvement is seen as critical to addressing HAL’s production bottlenecks. While HAL aims to scale Tejas Mk1A production to 24 jets annually by 2027 with a new line in Nashik, establishing a separate private production line for Tejas was deemed economically unviable. However, the AMCA’s high-tech requirements and long-term production timeline make private sector participation more feasible, potentially allowing firms like L&T and TASL to set up dedicated facilities.
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