SOURCE: AFI
The Aeronautical Development Agency’s (ADA) push to develop India’s indigenous fifth-generation fighter jet, the Advanced Medium Combat Aircraft (AMCA), has sparked concerns among private companies, who allege that the process is heavily tilted in favor of state-owned Hindustan Aeronautics Limited (HAL). According to a report by The Print, ahead of a pre-Expression of Interest (EOI) meeting scheduled for July 4, 2025, private industry sources have voiced apprehensions about the stringent qualifying criteria outlined in the EOI, which they claim effectively ensures HAL’s dominance in securing the high-stakes contract.
On June 18, 2025, the ADA took a significant step towards realizing India’s ambition of developing a fifth-generation stealth fighter by issuing an EOI for the AMCA’s prototype development. The AMCA, designed to bolster the Indian Air Force’s (IAF) capabilities with advanced stealth, supercruise, and artificial intelligence-powered systems, is a cornerstone of India’s quest for self-reliance in defence under the Make in India initiative. The program aims to roll out five prototypes by 2028–29, with the first flight targeted for 2029 and series production by 2035, addressing the IAF’s need for seven squadrons (approximately 126 aircraft) to counter regional threats, particularly from China and Pakistan.
The EOI, issued under a public-private partnership (PPP) model approved by Defence Minister Rajnath Singh on May 26, 2025, allows both public and private Indian companies to bid independently, as joint ventures, or as consortia. However, private companies contend that the process is structured to favor HAL, which has long been India’s sole manufacturer of fighter aircraft, including the Tejas Light Combat Aircraft (LCA).
Industry sources cited by The Print argue that the EOI’s stringent qualifying criteria make it nearly impossible for private companies to compete independently for the AMCA contract. A key point of contention is the requirement that bidding entities—whether a single company, joint venture, or consortium—must be owned and controlled by resident Indian citizens. This restriction prevents private companies, which often rely on collaborations with foreign Original Equipment Manufacturers (OEMs) for manufacturing parts and components, from forming joint ventures with international partners for the AMCA project. “Even now, Indian companies manufacturing parts and components are doing so in collaboration with foreign OEMs,” one source told The Print, highlighting the dependency on foreign expertise in India’s aerospace sector.
Additionally, the EOI mandates that all key managerial positions, including CEO, CFO, COO, and the entire Board of Directors, be held by resident Indian citizens. This clause, according to a second source, restricts private companies from hiring foreign talent to lead the AMCA venture, further limiting their ability to compete effectively. “No private company can actually hire a foreign talent at the top to spearhead the venture,” the source added, underscoring the challenges faced by private players in meeting the EOI’s rigorous requirements.
HAL’s extensive experience in aerospace manufacturing, including its role in producing the Tejas LCA and supporting the AMCA’s structural design, positions it as the frontrunner for the contract. Posts on X indicate that HAL has received 24 responses from indigenous companies to form a consortium, with HAL poised to lead the bidding process. However, private companies allege that HAL’s proposed joint venture structure—where it holds a 50% stake and four private firms each hold 12.5%—disproportionately favors HAL, limiting private players to minor roles with limited workshare.
Critics argue that HAL’s track record, including delays in Tejas Mk1A deliveries and engine shortages, raises questions about its ability to lead the AMCA program without monopolizing control. Private companies like Tata Advanced Systems, Larsen & Toubro, Bharat Forge, and VEM Technologies, which have experience in aerospace manufacturing and collaborations with HAL and the Defence Research and Development Organisation (DRDO), are potential contenders but face significant barriers due to the EOI’s criteria.
The AMCA program is critical for India’s defence strategy, particularly in light of China’s deployment of J-20 fifth-generation fighters along the Line of Actual Control and Pakistan’s potential acquisition of J-35A fighters. The IAF’s current shortfall of squadrons—31 against a sanctioned strength of 42—underscores the urgency of the AMCA’s development to modernize India’s airpower. However, private companies argue that the EOI’s structure risks stifling innovation and efficiency by limiting their ability to leverage global expertise, potentially delaying the program’s ambitious timeline.
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