Modi nod for $6.5-billion India-made combat jets, business for 500 firms in ecosystem

File Photo: Tejas Light Combat Aircraft in a HAL facility.

By N. C. Bipindra

New Delhi: In a significant business opportunity for local companies in the beginning of a new year, India today approved the $6.5-billion locally-made combat jets procurement for the air force, boosting the aerospace and defence industry that has been fighting hard against COVID-induced negative sentiments of 2020.

The Indian government’s highest decision-making body, chaired by Prime Minister Narendra Modi, gave its green signal for signing the deal between the Ministry of Defence (MoD) and the state-run Hindustan Aeronautics Limited (HAL) for the manufacture of 83 ‘Tejas’ Light Combat Aircraft (LCA) for a total cost of Rs 46,898 crore ($6.5 billion).

This spend — Rs 1,202 crore ($165 million) of which will go towards creating a design and development infrastructure — by the Indian government was much awaited by the Indian aerospace and defence industry and the Indian Air Force (IAF), both for different reasons.

While the industry wanted some business to come out of their difficult situation induced by COVID lock down, the air force wanted to badly enhance its combat fleet strength that has been falling below acceptable levels lately and has touched 30 squadrons against an approved 42 squadrons, due to the phase out of the Soviet-origin MiG-series combat jets.

HAL, which has completed licenced production of Sukhoi Su-30MKIs and the Hawk Advanced Jet Trainers in recent years, will see its order book swell with this latest purchase by the government. The contract is expected to be signed in the next few weeks.


The purchase of the Tejas is part of Modi’s $250-billion military modernisation plan that will continue till 2025 and is key to India’s efforts to counter a collusive threat from nuclear-armed neighbours China and Pakistan.

Today’s approval included the procurement of 73 Tejas Mk1A variants of the Defence Research and Development Organisation (DRDO) designed combat aircraft and 10 of its Mk1 trainer aircraft.

It is the first ‘Buy (Indian-Indigenously Designed, Developed and Manufactured)’ category procurement of combat aircraft with an indigenous content of 50 per cent, which will progressively reach 60 per cent by the end of the manufacturing period.

An indigenously designed, developed and manufactured four-plus generation fighter aircraft, Tejas is expected to be a potent platform to meet the operational requirements of the IAF.

Tejas Mk-1A variant is equipped with critical operational capabilities of Active Electronically Scanned Array (AESA) Radar, Beyond Visual Range (BVR) missile, Electronic Warfare (EW) suite and air-to-air refuelling (AAR).

The Cabinet’s approval today for the Tejas procurement included infrastructure development by the IAF under the project to enable them to handle repairs or servicing at their base depot so that the turnaround time would get reduced for mission critical systems and would lead to increased availability of aircraft for operational exploitation.

This would enable IAF to sustain the fleet more efficiently and effectively due to availability of repair infrastructure at the respective bases.

“Under the Atmanirbhar Bharat Abhiyaan (Self-Reliant India Initiative), India is continuously growing in its power to indigenously design, develop and manufacture advanced cutting edge technologies and systems in the defence sector,” the MoD said in a statement after the Cabinet’s decision.

“About 500 Indian companies including MSMEs (Micro, Small and Medium Enterprises) in the design and manufacturing sectors will be working with HAL in this procurement. The programme would act as a catalyst for transforming the Indian aerospace manufacturing ecosystem into a vibrant self-sustaining ecosystem.”

According to HAL officials, the production rate for this increased requirement by IAF is being augmented from eight to 16 aircraft annually through the creation of state-of-the-art new facilities in Bengaluru.

Tejas would have the highest level indigenisation in comparison to any programme of this scale with progressive indigenisation of critical technologies, thereby making India a technologically self-reliant nation. The programme would look at developing technologies indigenously, the officials, with direct knowledge of the project, said.

LCA ‘Tejas’ programme follows the system integrator model and has created a national aerospace ecosystem with the participation of 560 companies from Large to Small and Medium Enterprises, which encompass all the facets of aircraft design and manufacturing, they said.

The LCA Mk1A programme is expected to generate 5,000 primary jobs in India, apart from fostering local industry and driving skill development of the young Indian work force. More than 200 Indian companies are involved in tooling, GSEs, and GHEs supplies for the Tejas Mk1 programme.

Till date, the LCA project is estimated to have produced 50,000 primary and secondary jobs across the nation. For the first time in the nation’s aerospace history, the LCA programme has enabled partnership with Indian private players to manufacture aircraft fuselage and wings.

Some of the major companies contributing in the LCA programme from the Indian private sector are VEM Technologies Private Limited, Larsen & Toubro, Dynamatic Technologies Limited, Alpha – Tocol Engineering Services Private Limited, Tata Advanced Material Limited, Data Patterns India Private Limited, Pendios Technologies Private Limited, and Compupower Private Limited, among many others.

Former HAL chairman Dr R. K. Tyagi complimented the Narendra Modi government for the “positive decision” regarding the Mk1A variant of Tejas, and congratulated the HAL, the DRDO and the IAF for the government decision.

“It is a great step towards self-reliance in aerospace manufacturing in India and will create an excellent ecosystem with HAL, Bharat Electronics Limited, L&T and other 160 plus Indian companies, including MSMEs, participating in the production of the Tejas jets. The future of LCA is important for India,” Tyagi said.

“We must form a national advisory group of LCA for effective execution and technology adoptions. HAL also needs to increase annual production capacity. The skills gained under the LCA project should now be converted into a new national programme for Indian Regional Transport Aircraft.”

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