SOURCE: AFI
As India’s defence sector seeks to modernize and diversify, the potential involvement of private sector companies in manufacturing military aircraft is a topic of increasing debate. In particular, the question arises: if the private sector is allowed to produce fighter jets in the country, would the Indian Air Force (IAF) be willing to pay a premium for aircraft assembled by these companies?
Defence analyst Ranesh Rajan, known for his critical insights into India’s defense strategies, raised significant concerns regarding this prospect. According to Rajan, while the idea of fostering indigenous production of fighter jets is appealing, the IAF may face challenges in accepting such offerings at premium prices. “We want to follow the US model and create Lockheed Martin and Boeing of our own military aerospace majors. But to achieve this, we would need to buy their aircraft at prices that will be controlled by them, and also be ready to fund them as they demand,” Rajan said, cautioning against the potential cost implications of such partnerships.
Rajan’s perspective emphasizes the high stakes involved in the push for self-reliance under the “Make in India” initiative. While the program has garnered considerable attention for its ambitious goals, there are concerns about the costs associated with setting up local manufacturing infrastructure and sustaining long-term relationships with private players.
Rajan also pointed to the ongoing C-295 aircraft project, which is being undertaken by Tata Group in collaboration with Airbus. The C-295 program, a significant milestone in India’s defence manufacturing efforts, aims to produce medium transport aircraft in the country. Tata, a leading Indian industrial conglomerate, will assemble the aircraft locally, marking an important step in the domestic aerospace sector.
However, Rajan questioned the value that the private sector could bring to larger-scale military projects, such as fighter jets, and whether the industry could mature quickly enough to take on such responsibilities. He pointed out that, under the “Make in India” banner, the country is paying a premium not only for the local infrastructure but also to cover the profit margins of private entities like Tata Group. “In the name of Make In India, we are paying an extra premium for the infrastructure costs required to set up these facilities. There’s also an additional margin that has to be paid to the Tata Group,” Rajan explained.
Rajan’s concerns about long-term sustainability in India’s aerospace ambitions also extend to the future of the C-295 program. He raised the question: after Tata completes the current order of 65 to 100 units of the C-295, will they be able to independently develop a medium transport aircraft on their own?
The challenge lies in the transition from a one-off project to long-term indigenous capabilities. While Tata’s partnership with Airbus is seen as a step in the right direction, the question remains whether the company can build on the experience and scale up production to create independent, competitive aircraft designs for future needs. “After completing the order book of the C-295, what will happen to the program? Will Tata be able to develop and independently produce a medium transport aircraft?” Rajan asked.
This reflects a broader concern regarding the capabilities of private sector companies to transition from assembling foreign designs to developing entirely new and technologically advanced platforms that meet the demands of the Indian Armed Forces.
The real test will be how the private sector, especially entities like Tata Group, respond to these challenges. The success of initiatives like the C-295 program could provide valuable lessons for future projects, but much will depend on whether the sector can scale, innovate, and maintain quality at the levels required by the IAF.