The government’s decision to expose the Advanced Medium Combat Aircraft (AMCA) program to competitive bidding has significantly changed the military aircraft production landscape, marking a turning point for India’s defense manufacturing industry.
This historic ruling, which was accepted by Defence Minister Rajnath Singh on May 27, 2025, ends Hindustan Aeronautics Limited’s (HAL) decades-long monopoly in the production of fighter aircraft and opens the prestigious contract to competition from private sector behemoths Larsen & Toubro (L&T) and TATA Advanced Systems Limited (TASL). The policy change attempts to use the efficiency of the private sector to address India’s pressing air power needs and is a strategic response to HAL’s ongoing manufacturing delays, especially with the TEJAS MK-1A program.
Only 31 of the Indian Air Force’s 42 authorized squadrons are now in service, a major gap of more than 25% that has prompted serious concerns over operational readiness. The current gap is considerably more concerning because defense experts estimate that India needs about 60 squadrons to credibly defend against possible simultaneous threats from China and Pakistan. The retirement of aging MiG-21 and MiG-27 aircraft has made this capability gap worse, as new inductions have not kept up with the decommissioning timeline.
This situation has been made worse by HAL’s production difficulties, which have made it difficult for the corporation to fulfill delivery deadlines for several ongoing projects. Alongside the HJT-36 Yashas program, the state-owned firm is currently in charge of the HLFT-42 Lead-in Fighter Trainer, 83 TEJAS MK-1A fighter manufacturing, and the development of the TEJAS MK-2 and Su-30 MKI upgrades. Air Force leadership has been especially irritated by the company’s inability to produce any of the ordered TEJAS MK-1A jets by the original March 2024 deadline, which was attributed to supply chain problems.
The authorized AMCA Program Execution Model, which requires competitive bidding for both prototype development and production contracts, radically changes India’s strategy for producing military aircraft. Under this arrangement, Indian businesses like as HAL, L&T, TASL, and others like the Adani Group and Kalyani Group will be able to submit individual bids or form joint ventures and consortia through the issuance of an Expression of Interest by the Aeronautical Development Agency (ADA). The government’s commitment to encouraging competition and improving efficiency through private sector participation is demonstrated by this break from convention, where HAL would have been the default option.
The competitive approach seeks to maintain strategic control through government agencies while utilizing the capabilities of the private sector to accomplish ambitious deadlines. Businesses must be Indian organizations that abide by local rules and regulations, guaranteeing that national security concerns are given top priority while providing chances for creativity and efficiency gains. The strategy is based on learning from international aerospace projects where cost-effectiveness and development cycles have been advanced through public-private partnerships.
Because of its well-established infrastructure and vast aerospace production experience, HAL continues to be the front-runner for the AMCA contract despite the competitive market. With more than 200 Su-30MKI planes built under Russian licensing agreements, the company’s Nashik factory is well-positioned to serve as a possible AMCA production hub. HAL has a head start in program knowledge and technical understanding because it started exploratory work on AMCA prototypes as early as 2022.
HAL’s present production obligations, however, seriously jeopardize its hopes of becoming an AMCA. The business is juggling many other programs while attempting to increase TEJAS MK-2 manufacturing to 24 planes per year by 2027. Confidence in HAL’s execution ability has been eroded by the ongoing delays in TEJAS deliveries, with the first MK-1A aircraft only being delivered from the Nashik site in June 2025 following several postponements. These issues have been brought to light by Air head Marshal AP Singh’s public criticism of HAL’s performance on the delivery deadline. The IAF head expressed anger over the company’s failure to fulfill contractual obligations.
With a wealth of experience in aerospace and defense manufacturing across several industries, Tata Advanced Systems Limited stands out as a strong competitor. The business has formed important alliances with major players in the aerospace industry worldwide, such as joint ventures with Boeing for the production of Apache helicopter fuselages and agreements with Airbus for the manufacturing of C295 military transport aircraft in India. TASL’s technological strengths are demonstrated by its participation in important fighter jet programs, such as producing tail fins for the domestic TEJAS program, wings for F-16 Block 70 aircraft with Lockheed Martin, and fuselages for Rafale fighters in collaboration with Dassault Aviation.
Aero-structures and aero-engines, airborne platforms and systems, defense and security solutions, and land mobility systems are all part of the company’s extensive portfolio. TASL’s production precision and global competitiveness are demonstrated by its experience in creating intricate aerospace components, such as the whole structure for Pilatus PC12 aircraft and acting as the world’s exclusive source for C-130J empennages. The company’s demonstrated capacity to manage advanced defense technologies is further evidenced by its track record in missile and rocket launcher systems, including the Akash, MRSAM, and Pinaka platforms.
Another formidable candidate for the AMCA program is Larsen & Toubro, which has three decades of experience in defense partnerships with the Indian Armed Forces and DRDO. Land-based weapon launch systems, air defense and artillery systems, maritime weapon launch systems with fire control solutions, and complete missile systems development are all included in the company’s defense portfolio. L&T’s technological preparedness for intricate aerospace projects is demonstrated by its successful demonstration of its ability to manufacture missile subsystems, such as propulsion and fin actuation systems.
From coast guard and survey vessels to frigates and submarines, the company’s maritime manufacturing capabilities show that it can manage complicated, large-scale production projects. Due to government modernization programs, L&T’s defense division generated ₹6,185 crore in orders during the previous fiscal year. The company has lofty goals to grow into a multi-billion dollar organization. The company’s CFO has emphasized that they are prepared to use the shipyard’s current facilities for defense orders and to increase capacity as necessary to satisfy the increasing demand.
To maximize the advantages of both public and private sector expertise, the government has suggested creative collaboration models. According to one suggested plan, HAL would own 50% of a joint venture, with four private companies each investing 12.5%. This would create a well-balanced partnership that would take advantage of HAL’s experience while also embracing the efficiency of the private sector. Under this arrangement, task packages involving design completion, the acquisition of raw materials, component production, and the construction of ground support equipment would be divided among consortium members.
Private companies should take the initiative to prevent past production delays, according to some analysts, who contend that HAL’s prominent involvement in such arrangements may inhibit private sector innovation. To guarantee effective development and manufacturing, the Special Purpose Vehicle (SPV) model—which was previously taken into consideration for the AMCA program—would unite a number of stakeholders, including DRDO, HAL, and private sector companies. This method allows government defense R&D money to be transferred to the private sector for large-scale projects by having the government agency oversee the project while choosing private firms to create key technologies and components.
The ambitious development timeline for the AMCA program necessitates meticulous coordination across all parties involved. In June 2025, DRDO Chief Dr. Samir V. Kamat stated that the Aeronautical Development Agency intends to finalize the production partner within six months. The initial deployment of the prototype is scheduled for late 2026 or early 2027. The maiden flight is scheduled for 2028, certification is scheduled for 2032, and service induction is scheduled for 2034.
In order to prevent the delays that have beset earlier programs, this ambitious schedule calls for parallel development and production planning. In order to achieve strategic needs, the competitive bidding process must strike a compromise between the need for quick program progression and a thorough assessment of capabilities. The capacity of the chosen partners to build strong supply chains, create the required manufacturing infrastructure, and uphold quality standards while expanding output to satisfy IAF demand will determine success.
The Twin Engine Deck-based Fighter (TEDBF), Indian Multi-Role Helicopter (IMRH), and other missile systems are only a few of the large projects for which competitive bidding may be extended if this approach proves successful. A balanced strategy that preserves strategic control while utilizing commercial efficiency and innovation is the combination of private sector skills with government oversight.
The conclusion of the AMCA program will have a big impact on India’s standing in the global aerospace hierarchy and might make the nation a reputable developer and manufacturer of fifth-generation fighters. In addition to meeting the IAF’s urgent needs, success would open up export markets and help India reach its ₹50,000 crore defense export goal by FY29. The initiative is a crucial test of India’s capacity to carry out intricate defense projects through public-private collaborations while preserving its strategic independence and technological sovereignty.
A new era in Indian defense manufacture has begun with the historic transition from HAL’s monopolistic rule to competitive bidding, where success will be determined by performance, efficiency, and innovation rather than by old institutional domination. One of the most important choices in India’s defense modernization process is the final choice of production partners, which will influence the nation’s aerospace capabilities for many years to come.
