The government’s decision to allow the private sector to manufacture sophisticated fighter aircraft, breaking with the long-standing hegemony of public sector behemoth Hindustan Aeronautics Limited (HAL), is bringing about a dramatic change in the Indian defense environment.
At the heart of this change is India’s ambitious fifth-generation stealth fighter aircraft, the Advanced Medium Combat Aircraft (AMCA). A new “program execution model” that has been approved by the defense ministry permits private companies to bid on the AMCA project, either alone, in partnerships with other Indian businesses, or in coordination with foreign original equipment manufacturers (OEMs), as long as they abide by national defense regulations.
By utilizing the potential of India’s expanding commercial aerospace sector, this action aims to expedite the AMCA’s development and implementation.
Several significant orders have put a strain on HAL, which has historically been the only manufacturer of fighter jets in India. Under a ₹1.2 lakh crore deal, the business is now responsible for delivering 180 TEJAS MK-1A planes. Plans are also underway to manufacture an additional 108 TEJAS MK-2 jets as well as a number of other aircraft and helicopters.
In order to reduce its burden and speed up manufacturing, the Defense Ministry believes that HAL will engage with private companies on the AMCA project. However, a significant policy change intended to promote a strong domestic aerospace ecosystem is being signaled for the first time private companies are being allowed to bid alone or in collaboration.
In the near future, interested businesses will be asked to submit proposals to the Aeronautical Development Agency (ADA), which is working on the AMCA under the Defence Research and Development Organization (DRDO). It is anticipated that the new model will promote the government’s goal of self-reliance (or “Atmanirbharta”) in defense manufacture by utilizing local knowledge and capabilities.
India will join a limited few countries with fifth-generation fighter technology when the AMCA, which is expected to be produced after 2030, is equipped with cutting-edge features like internal armament bays, data fusion, stealth technology, and swing-role operations.
The role of the private sector in Indian defense production is already growing. For instance, the Tata Group is building India’s first private helicopter assembly line in Karnataka and working with Airbus to produce C-295 cargo aircraft in Gujarat. These changes demonstrate how private companies in the aerospace industry are becoming more capable and mature.
Notwithstanding these encouraging advancements, HAL’s performance has presented the Indian Air Force (IAF) with serious difficulties. HAL has been openly criticized by IAF Chief Air Marshal AP Singh for the TEJAS program’s frequent delays. Originally conceived in 1984, the TEJAS project only saw its first flight in 2001 and induction in 2016.
Not all 40 of the aircraft ordered in the original contracts have been delivered to the IAF as of yet. HAL had committed to delivering 16 planes in 2024–2025 under a ₹46,898 crore contract signed in 2021, however the improved TEJAS Mk-1A variant has also been delayed. However, primarily because of General Electric’s (GE) engine supply delays in the US, just two to three aircraft are anticipated this year.
By March 2025, GE has now committed to provide 99 F404 engines. A deal to co-produce more potent F414 engines in India with 80% knowledge transfer is also being finalized by HAL and GE for use in the TEJAS MK-2.
The Indian government has placed a new order for 97 additional TEJAS Mk-1A fighters, valued at ₹67,000 crore, in spite of these setbacks, highlighting the urgent need for domestic fighter aircraft as the IAF’s squadron strength continues to deteriorate.
Through a number of important procedures, it is anticipated that private companies’ involvement in the Advanced Medium Combat Aircraft (AMCA) project will speed up both development and induction.
First, allowing private businesses, consortia, and joint ventures to bid competitively on the project—including working with international original equipment manufacturers (OEMs)—brings a level of efficiency and competition that was previously lacking in India’s defense manufacturing sector. As businesses compete to produce the best technology and deadlines to win contracts, this competitive climate encourages quicker project execution, innovation, and cost-effectiveness.
Second, private sector participation makes use of India’s aerospace industry’s larger resources and capabilities. Numerous private businesses, including Reliance Aerospace, Larsen & Toubro, and Tata Advanced Systems, have previously proven their proficiency in fast prototyping, supply chain management, and high-tech manufacturing. Their involvement enables risk-sharing, parallel development, and the pooling of specialized expertise, all of which might greatly minimize the delays and bottlenecks that have traditionally beset large-scale defense projects managed exclusively by public sector organizations like HAL.
Third, the government’s objective of creating a strong domestic aerospace ecosystem is supported by the involvement of private companies. The project gains from more infrastructure investment, technology transfer, and personnel upskilling when a larger range of stakeholders are involved. In addition to accelerating the current effort, this reduces dependency on imports by laying the foundation for future domestic defense manufacture.
Lastly, the Aeronautical Development Agency (ADA) under DRDO is spearheading the project and will shortly send out expressions of interest to industry partners. The new execution methodology is intended to use indigenous experience and capabilities.
This cooperative approach is expected to expedite development, reduce bureaucratic obstacles, and guarantee the timely delivery of advanced capabilities to the Indian Air Force, supporting the government’s clear roadmap that aims for the first prototype flight by 2029 and series production by 2035.
By encouraging competition, utilizing a range of skills, increasing industrial capacity, and facilitating a more flexible and effective project management process, the involvement of private companies speeds up AMCA development and induction. A strategic move towards a more dynamic and competitive defense manufacturing industry is represented by the involvement of private companies in the AMCA initiative. Although HAL is still a major player, the government has decided to open the sector to private business because to its capacity limitations and previous delays.
This strategy seeks to reinforce independence, expedite the development of cutting-edge military platforms, and meet the Indian Air Force’s pressing operational requirements.
