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A significant disagreement is brewing over the manufacturing of India's futuristic fifth-generation stealth fighter, the Advanced Medium Combat Aircraft (AMCA), as a dispute has erupted between the state-owned aerospace behemoth Hindustan Aeronautics Limited (HAL) and private sector defence firms over the partner selection process.
This controversy places the government at a critical crossroads between relying on established experience and fostering a competitive domestic defence industry.
The Aeronautical Development Agency (ADA), the government body responsible for designing the AMCA, initiated the selection process by issuing an Expression of Interest (EoI) to identify a private or public sector partner.
This partner would join a Special Purpose Vehicle (SPV) alongside ADA and HAL to oversee the aircraft's development and production. However, HAL has lodged an objection to the terms laid out in the EoI, claiming the parameters are unfairly designed to favour private companies.
HAL's position is rooted in its extensive and unmatched experience in the Indian aerospace sector. With a legacy that includes the manufacturing and support of aircraft like the Light Combat Aircraft (LCA) Tejas, HAL argues that its existing infrastructure, established supply chains, and skilled workforce make it the most logical and low-risk choice.
From its perspective, private competitors would face a steep learning curve and require substantial investment to build comparable manufacturing capabilities from the ground up.
Conversely, private defence companies have voiced their concerns directly to the Ministry of Defence, asserting that the current structure puts them at an inherent disadvantage.
They argue that HAL’s massive scale, guaranteed order book, and decades of government support create an unlevel playing field. According to them, competing against such an established public-sector entity is nearly impossible if the selection criteria do not account for these imbalances.
The central point of contention is the point-based evaluation system proposed by the ADA.
Private firms are advocating for a more flexible framework that rewards innovation, efficiency, and modern manufacturing potential rather than solely prioritising historical experience.
They fear that without such adjustments, the qualification parameters will be so rigid that only HAL can meet them, rendering the competitive process meaningless and defeating the purpose of inviting private participation.
This disagreement presents a strategic dilemma for the Indian government.
On one hand, HAL represents a proven and reliable partner for a project of immense national importance. On the other, a core objective of the government's 'Aatmanirbhar Bharat' policy is to cultivate a robust and competitive private defence manufacturing ecosystem.
Encouraging private sector involvement is seen as essential for expanding the nation's industrial base, driving innovation, and avoiding over-reliance on a single entity.
Adding to the complexity is HAL's current production capacity. The company is already managing an enormous order book valued at over ₹2 lakh crore, which includes large-scale orders for Tejas fighter jets and various helicopters.
Critics suggest that assigning the AMCA project exclusively to HAL could strain its resources and potentially lead to delays. Involving a private partner could therefore help distribute the workload, mitigate risks, and potentially accelerate the timeline for delivering this critical next-generation aircraft to the Indian Air Force.
