The Indian defence landscape is undergoing a significant transformation as the government opens the doors of advanced fighter aircraft manufacturing to the private sector, marking a departure from the long-standing dominance of public sector giant Hindustan Aeronautics Limited (HAL).

The Advanced Medium Combat Aircraft (AMCA), India’s ambitious fifth-generation stealth fighter project, is at the centre of this shift. The Defence Ministry has approved a new ‘program execution model’ that allows private companies to bid for the AMCA project—either independently, in joint ventures with other Indian firms, or in collaboration with foreign original equipment manufacturers (OEMs), provided they comply with national defence regulations.

This move is designed to accelerate the development and induction of the AMCA by leveraging the capabilities of India’s growing private aerospace industry.

HAL, traditionally the sole producer of India’s fighter jets, is now stretched thin by several major orders. The company is currently tasked with delivering 180 TEJAS MK-1A jets under a ₹1.2 lakh crore contract, with plans to build another 108 TEJAS MK-2 jets and several other aircraft and helicopters in the pipeline.

The Defence Ministry hopes that HAL will collaborate with private firms for the AMCA project to ease its workload and expedite production. However, for the first time, private players are being given the opportunity to bid independently or in partnership, signalling a major policy shift aimed at fostering a robust domestic aerospace ecosystem.

The Aeronautical Development Agency (ADA), which is designing the AMCA under the Defence Research and Development Organisation (DRDO), will soon invite proposals from interested companies. The new model is expected to harness indigenous expertise and capacity, supporting the government’s vision of self-reliance (‘Atmanirbharta’) in defence manufacturing.

The AMCA, scheduled for production after 2030, will feature advanced capabilities such as stealth technology, internal weapon bays, data fusion, and swing-role operations, placing India among a select group of nations with fifth-generation fighter technology.

The private sector’s role in Indian defence manufacturing is already expanding. For example, the Tata Group is collaborating with Airbus to assemble C-295 transport aircraft in Gujarat and is establishing India’s first private helicopter assembly line in Karnataka. These developments highlight the growing maturity and capability of private players in the aerospace sector.

Despite these positive developments, the Indian Air Force (IAF) has faced significant challenges with HAL’s performance. IAF Chief Air Marshal AP Singh has publicly criticised HAL for repeated delays in the TEJAS program. The TEJAS project, conceptualised in 1984, saw its first flight in 2001 and induction only in 2016.

Even today, the IAF has not received all 40 aircraft ordered in the initial contracts. The upgraded TEJAS Mk-1A version has also been delayed, with HAL initially committing to deliver 16 jets in 2024–25 under a ₹46,898 crore contract signed in 2021. However, only 2–3 aircraft are expected this year, mainly due to delays in engine supplies from General Electric (GE) in the US.

GE has now promised to deliver 99 F404 engines by March 2025. Additionally, HAL and GE are finalising a deal to co-produce more powerful F414 engines in India, with 80% technology transfer, for use in the TEJAS MK-2.

Despite these setbacks, the Indian government has placed a fresh order for 97 more TEJAS Mk-1A fighters worth ₹67,000 crore, underscoring the critical need for indigenous fighter aircraft as the IAF’s squadron strength continues to decline.

How Will Private Firms' Participation Accelerate AMCA Development And Induction

Private firms’ participation in the Advanced Medium Combat Aircraft (AMCA) project is expected to accelerate both development and induction through several key mechanisms.

First, opening the project to competitive bidding among private companies, consortia, and joint ventures—including collaborations with foreign original equipment manufacturers (OEMs)—introduces a level of competition and efficiency previously absent in India’s defence manufacturing landscape. This competitive environment incentivises faster project execution, innovation, and cost-effectiveness, as firms vie to deliver the best technology and timelines to secure contracts.

Second, private sector involvement leverages the broader capabilities and resources of India’s aerospace industry. Many private companies, such as Tata Advanced Systems, Larsen & Toubro, and Reliance Aerospace, have already demonstrated expertise in high-tech manufacturing, supply chain management, and rapid prototyping. Their participation allows for parallel development efforts, risk-sharing, and the pooling of specialized skills, which can significantly reduce bottlenecks and delays that have historically plagued large-scale defence projects handled solely by public sector units like HAL.

Third, the inclusion of private firms supports the government’s goal of building a robust domestic aerospace ecosystem. By involving a wider array of stakeholders, the project benefits from increased investment in infrastructure, technology transfer, and workforce upskilling. This not only speeds up the current project but also lays the groundwork for future indigenous defence manufacturing, reducing reliance on foreign imports.

Finally, the new execution model is designed to harness indigenous expertise and capacity, with the Aeronautical Development Agency (ADA) under DRDO leading the project and soon issuing expressions of interest to industry partners.

The government’s clear roadmap—targeting the first prototype flight by 2029 and series production by 2035—is reinforced by this collaborative approach, which is expected to streamline development, minimize bureaucratic hurdles, and ensure timely delivery of advanced capabilities to the Indian Air Force.

Private firms’ participation accelerates AMCA development and induction by fostering competition, leveraging diverse expertise, building industrial capacity, and enabling a more agile and efficient project management process. The inclusion of private players in the AMCA project represents a strategic shift towards a more competitive and dynamic defence manufacturing sector. While HAL remains a key player, its capacity constraints and past delays have prompted the government to open up the sector to private industry.

This approach aims to accelerate the development of advanced military platforms, strengthen self-reliance, and address the urgent operational needs of the Indian Air Force.

IDN