Defence Ministry Plans to Expand Private Sector Role in AMCA Project amid Industry Investment Concerns and Delayed Timelines

The Ministry of Defence is re-evaluating the role of private companies in India's prestigious Advanced Medium Combat Aircraft (AMCA) programme.

The move is a direct response to concerns from a major private industry partner that the currently assigned work is too limited to justify the significant financial investment required.

The AMCA is India's ambitious initiative to design and manufacture a 5th-generation stealth fighter jet, placing the nation in an elite group of countries with such capabilities. The project is spearheaded by the Aeronautical Development Agency (ADA) and the state-owned Hindustan Aeronautics Limited (HAL).

However, a key private firm, which is currently slated to manufacture only the aircraft's frame, has formally expressed that this limited scope does not provide a viable return on investment.

In an effort to address these industry concerns and accelerate the project, the Defence Ministry is considering a proposal to significantly increase the work allocated to private partners.

This could involve offloading critical responsibilities beyond the airframe, such as the integration of advanced avionics, development of key sub-systems, structural assembly, and the creation of essential ground support systems.

Such a move would give private companies a much larger and more meaningful stake in the programme.

This development follows the formal project sanction granted by the Cabinet Committee on Security (CCS) in March 2024. The CCS approved an initial budget of approximately ₹15,000 crore for the design and development of five AMCA prototypes.

The timeline for the project aims for the first prototype to be rolled out by 2028, with series production expected to commence in the early 2030s.

Private sector companies argue that developing the advanced manufacturing infrastructure needed for modern aerospace projects is a capital-intensive undertaking.

Without a substantial and guaranteed share of the work, it is financially difficult for them to commit to the necessary long-term investments in technology and facilities.

Expanding their involvement would not only make the project more financially attractive for them but also align with the government's overarching goals of 'Make in India' and 'Atmanirbhar Bharat' (a self-reliant India).

A more balanced public-private partnership is expected to yield numerous benefits for the AMCA programme. By diversifying the industrial base beyond state-run entities like HAL, the ministry hopes to boost innovation, accelerate production rates, and build a more robust and competitive domestic aerospace and defence ecosystem.

The final framework for this enhanced collaboration is expected to be announced in the coming months. The decision will be made following detailed consultations between the Ministry of Defence, ADA, HAL, and representatives from key private sector stakeholders.

The outcome of these discussions will be crucial in shaping the future and pace of India's most advanced aviation project.

 

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[sanket]

Good, give maximum stake to private players for manufacturing. Also, involve them in the integration of the AMCA Fighter jet; they will learn from the AMCA project and be prepared for future fighter jet projects which will be more sophisticated like AMCA.

 

[parimal vaikuthray Pandya]

Good, give maximum stake to private players for manufacturing. Also, involve them in the integration of the AMCA Fighter jet; they will learn from the AMCA project and be prepared for future fighter jet projects which will be more sophisticated like AMCA.

Private sector of India are notorious for getting monopolistic licence raj of TATA and Birla in old days and now they send substandard output of the educational institution own established into government services. They are not willing to obey government rules as an example Jio and Airtel forced to implement recharge plan without data

 

[SURESH RAO]

As a first step, private companies should start manufacturing fuselage, airframe, tail, wings, nose, pylons, and cockpits.

Then they can start manufacturing and producing more complicated components like AESA radar, EW suite, IR pod, FADEC, flight control software, FBW software, ground test bed, and airborne test bed, etc.

All this will take at least 5 years. Private companies will only invest if there are good returns and long-term orders.

 

[Sandeep]

This is a very critical project and we can’t afford anymore delays or cost escalation so whatever the issues are they need to resolve them very quickly.

One problem is that apart from HAL nobody else in the entire country has the knowledge, skills, expertise, machinery and experience in designing, developing or manufacturing an advanced fighter jet. This is a problem that needs resolving carefully and practically.

HAL already has a huge amount of indigenous projects that they are already developing or manufacturing it like the Tejas MK1A, Tejas MK2, TEDBF, Naval Dhruv, Dhruv, LUH, Prachand, Archer NG, IMRH, DMRH, Dornier, basic trainer, intermediate trainer, advanced trainer, CATS combat team, rocket engines and a variety of engines to power them. Then they have projects to upgrade our jets, helicopters or planes like the Super Sukhoi, naval Dhruv, Mirage 2000, Mig 29, Jaguar etc which are slowly upgraded or overhauled etc. Based on all of these projects HAL is overburdened and has enough projects to last them for decades.

That’s why it’s essential that we work very closely with the private sector on how to design, develop and manufacture jets, helicopters, drones, engines etc which can teach them to one day develop their own jets.

With the AMCA project HAL should only be allowed to manufacture a maximum amount of 25% but the private sector should be manufacturing at least 75% or more. HAL should only be in charge of integrating, assembling, testing, certifying and manufacturing critical and sensitive equipment and technology like its engines, avionics, computer, software, weapons systems etc. This manufacturing model works for the best as it can manufacture more jets and more quickly while protecting any IPR and sensitive equipment, engines etc.

 

[parimal vaikuthray Pandya]

As a first step, private companies should start manufacturing fuselage, airframe, tail, wings, nose, pylons, and cockpits.

Then they can start manufacturing and producing more complicated components like AESA radar, EW suite, IR pod, FADEC, flight control software, FBW software, ground test bed, and airborne test bed, etc.

All this will take at least 5 years. Private companies will only invest if there are good returns and long-term orders.

 

[parimal vaikuthray Pandya]

No one guarantee that project will be successful but government has no option to switch over to privatisation of the defence development with suffering with failure since a long time constantly and getting criticism of media reports