HAL HS-748 medium-sized turboprop airliner

by Purusharth Arora

India established a private military aircraft production line by excluding HAL and accepting a single bid. This approach succeeded, making the surrounding policy questions more significant than the aircraft itself.

On 12 May 2026, TATA Advanced Systems rolled out the first Airbus C295 assembled in India. On 10 June it made its maiden flight, and delivery to the Indian Air Force was slated for September. Fourteen years earlier, in 2012, the IAF had merely been given a go-ahead to start looking for a replacement for its Avro transports.

It is important to acknowledge that the production line exceeded its own schedule. The first Make-in-India C295 was scheduled for rollout in September 2026 but was completed in May. In an industry where delays are common, this achievement is noteworthy and warrants further examination of its implications.

The C295 demonstrates that India is capable of developing an indigenous aerospace industry when it makes a deliberate decision to do so. Consequently, areas where such development has not occurred reflect policy choices rather than inherent limitations.

The Competition That Wasn't

The popular account has a private firm doing what a state monopoly could not. The record is stranger and more interesting. The tender was restricted to the private sector, excluding HAL. When bids closed in October 2014, only one had come in, from Airbus with TATA. The ministry wobbled, with a fresh tender floated as a possibility and HAL offering to extend the life of the old Avros instead. In the end, the Defence Acquisition Council cleared the lone bid in May 2015, and in September 2021 the government signed a ₹21,935-crore contract for 56 aircraft.

This process did not align with conventional procurement practices. Instead, it represented industrial policy implemented through the mechanisms of procurement. The government intentionally sought to establish a second center of aircraft manufacturing, structured the rules accordingly, and accepted a single qualified bidder. The tender was intentionally designed as a single-competitor process.

I do not say that to sneer. It worked, and we should take that seriously. When the Indian state chooses to build private capability, it can. Anyone who argues that India's aerospace industry is limited by capacity can point to the C295. Decisions limit it, and so far those decisions have focused on where aircraft are assembled.

Two Numbers That Sound Alike

Airbus says the programme will deliver more than 85 per cent of structural and final assembly of the 40 Indian-built aircraft, along with 13,000 detail parts, 21 certified special processes and 37 Indian suppliers. Reporting on the government's own figures speaks instead of indigenous content rising from 48 per cent in the first 16 of those aircraft to 75 per cent in the remaining 24.

Although these two figures appear similar, they represent distinct metrics. The first measures the location of production, while the second assesses the composition of the aircraft. The gap between these metrics reflects the difference between manufacturing capability and design authority, the latter of which remains in Seville. This arrangement is acceptable initially, but it becomes problematic if progress toward local design authority is not systematically evaluated.

The extent of Indian design contribution in this aircraft is limited. The first C295 delivered to the IAF included an indigenous electronic warfare suite. Although this represents a small portion of the overall design, it is a strategically significant component, as it is a critical area for sovereign control. The limited scope of this contribution highlights the need for further advancement.

The examination arrives in August.

On 12 August, on the eve of Independence Day, the Ministry of Defence issued its request for proposals for 60 medium transport aircraft, reportedly worth around nine billion euros, to replace the An-32 and the ageing Il-76. HAL, TATA, Mahindra, Adani and Reliance Defence each bid alongside a foreign partner. The leading offers are Embraer's C-390 with Mahindra, with an assembly line planned for Nagpur, and Lockheed Martin's C-130J with TATA, which already makes C-130J tail units in Hyderabad. Airbus's A400M.

The current competition primarily involves foreign aircraft with Indian partners. TATA represents at least two of the leading bids, making it likely that a TATA production line will result regardless of the outcome. While this may be a sound business strategy, it reflects a limited market structure.

When a single Indian group participates in multiple rival bids, genuine competition among Indian developers is lacking. The C295 process was a single-bid competition; at best, the MTA represents a contest among foreign designs with a small group of Indian assemblers. This is an improvement, but it does not fully address the need for indigenous development. a short list of Indian assemblers. Better, but still not what we should be asking for.

There has also been a notable policy shift. In 2013, HAL was excluded from the Avro tender, whereas in 2026 it is now eligible to respond to a new request for proposals. The government initially excluded the incumbent to foster competition, and now includes it because alternative contenders exist. This progression is justifiable if it leads to meaningful change.

The critical issue is whether the evaluation criteria prioritize substantive outcomes or merely quantifiable metrics. While reports indicate that the RFP emphasizes local production and technology transfer, there appears to be no requirement for a design-ownership roadmap for Indian partners.

The Missing Second Aircraft

Currently, there is no Indian-designed transport aircraft projected for production by this industrial base in 2040. The previous Indo-Russian co-development initiative has been characterized as unsuccessful in some accounts of the MTA. The manufacturing ecosystem emerging in Vadodara, with its network of suppliers, specialized processes, and skilled workforce, represents a significant national asset. However, without a corresponding design pipeline, this industrial base remains dependent on external design authorities, limiting its long-term autonomy and influence.

Industries that successfully transitioned from licensed assembly to original aircraft design did so through deliberate contractual provisions. For India, a practical approach would be to ensure that Indian partners retain ownership of system integration engineering for variants tailored to the IAF and Navy, particularly those not produced by the original design authority. Indian industry should possess the associated engineering intellectual property, rather than licensing it from the original equipment manufacturer. This process should begin with the current contract negotiations, rather than being deferred to future procurement cycles.

Four questions for the MTA table

1. Will the evaluation reward design ownership, or only local content measured by value and person-hours?
2. Why should a single Indian group be able to sit behind several rival bids, and what does that do to price discovery?
3. Does India want a second private aircraft designer? If so, what is the funded first step, and what is its date?
4. What would it take for the Indian-specific variants to be Indian-led, not Indian-assembled?

The Verdict

Assembly should not be viewed as a lesser achievement. All aircraft industries begin by building designs developed elsewhere, and the C295 production line merits recognition for its early and substantive accomplishments, particularly given the inexperience of the workforce.

However, the policy model that enabled this success was exceptional, reflecting a deliberate state intervention to foster industry development. If similar commitment is applied to indigenous design, the C295 will be regarded as a foundational milestone. If the focus remains solely on assembly, future efforts may be seen merely as expansions of manufacturing capability rather than advancements in design leadership.

India now faces a critical question: not whether it can manufacture aircraft, which it has demonstrated, but whether it will choose to achieve full ownership of indigenous designs.

Purusharth Arora is a defence analyst, whose expertise explores global power shifts, strategy, diplomacy transitions, and the geopolitics of systemic risk. Views expressed are personal