The Indian Air Force (IAF) is facing a critical strategic decision as its fighter squadron strength has fallen to approximately 31, well below the 42 squadrons required to manage potential threats on two fronts.
This challenge is compounded by a global market where the cost of advanced fighter jets is escalating rapidly.
This situation forces a choice: pursue costly and elusive foreign aircraft or commit fully to the indigenous Tejas Mk2, a platform that promises a more self-reliant and economically viable fleet.
Global inflation, strained supply chains, and rising raw material costs have dramatically increased the price of foreign military hardware. The era of affordable imports has ended.
For example, the unit cost of advanced Western jets like the Dassault Rafale consistently exceeds $120 million. Even "budget-friendly" 4.5-generation aircraft, such as Sweden's Gripen E, are now estimated to cost over $85 million per unit, according to 2025 market reports.
This escalating cost crisis directly impacts India's long-delayed Multi-Role Fighter Aircraft (MRFA) tender. The plan to acquire 114 foreign jets, a procurement process that has seen various iterations since the original MMRCA tender was floated, is now projected to cost between $20 billion and $24.5 billion.
After more than a decade of delays, the tender remains unresolved. Recent reports from mid-2025 suggest the government may even be reconsidering the single-tender approach, potentially splitting the purchase.
In contrast, India's indigenous HAL Tejas Mk2 is presented as a powerful and economical alternative.
This 4.5-generation aircraft is a significant upgrade over the Tejas Mk1A. It features a more powerful GE F414 engine, advanced canards for superior agility, and the domestically-developed Uttam AESA radar.
With a projected combat radius of 1,500 km and 13 hardpoints for a wide array of weapons, including the BrahMos missile, it is designed to be a multirole workhorse for the IAF.
The most compelling argument for the Tejas Mk2 is the financial arithmetic. With an estimated unit cost of $70-80 million, the indigenous fighter costs significantly less than its foreign counterparts.
For the same $24 billion budget allocated for 114 foreign jets, India could potentially procure and field over 250 Tejas Mk2 aircraft. This would provide more than double the number of fighters, offering a clear solution to the IAF's squadron depletion.
This strategy also aligns with the Aatmanirbhar Bharat policy, boosting the domestic defence ecosystem.
A primary concern has been Hindustan Aeronautics Limited's (HAL) production capacity. However, this capacity has been significantly enhanced.
With the inauguration of a new production line in Nashik in October 2025, HAL's total annual production capacity for the Tejas platform (currently the Mk1A) has increased from 16 to 24 aircraft.
A firm, large-scale order for 200 or more Tejas Mk2 jets is seen as the key to unlocking further efficiencies, potentially ramping up production to 30 aircraft per year by 2028.
The Tejas Mk2 program is advancing steadily. As of mid-2025, the first prototype was reportedly 60% complete. The aircraft's official rollout is anticipated by the end of 2025, with a first flight scheduled for early 2026.
Following a period of rigorous testing, the Tejas Mk2 is expected to achieve Initial Operational Clearance (IOC) and be ready for induction into the IAF by 2029-2030, bridging the gap until the indigenous 5th-generation AMCA is ready, which is projected for its debut after 2035.
