Private Giants L&T and TASL Enter Race for AMCA Production Contract, Challenging HAL's Decades-Long Monopoly amid Tejas Delays

In a landmark development for India's defence manufacturing sector, the government has opened the door for private companies to compete for the production of the nation's futuristic fifth-generation stealth fighter, the Advanced Medium Combat Aircraft (AMCA).

Industrial giants Larsen & Toubro (L&T) and Tata Advanced Systems Limited (TASL) are now positioned to challenge the long-standing dominance of the state-owned Hindustan Aeronautics Limited (HAL) for this prestigious contract.

This policy shift, confirmed by the Ministry of Defence, moves away from the traditional practice of automatically awarding aircraft manufacturing projects to HAL.

The decision to invite competitive bids is driven by a strategic push to expand India's industrial capacity, prevent production delays, and ensure the Indian Air Force (IAF) receives critical assets on schedule.

The Strategic Imperative of the AMCA​

The AMCA is the cornerstone of India's future air combat strategy and its Aatmanirbhar Bharat (self-reliant India) initiative in defence.

Designed by the Aeronautical Development Agency (ADA), the single-seat, twin-engine aircraft is a multirole stealth fighter intended for air supremacy, ground attacks, and missions to disable enemy air defence systems.

Featuring advanced technologies like a low radar signature, the ability to maintain supersonic speeds without afterburners (supercruise), and artificial intelligence-integrated avionics, the AMCA is set to be a formidable platform.

The IAF plans to procure an initial 126 of these aircraft, with production slated to begin around 2035.

The program, valued at approximately ₹15,000 crore for its initial development phase, is critical for replacing the IAF's aging Sukhoi Su-30 MKI fleet and maintaining a technological edge in the region.

Production Bottlenecks Prompt Policy Change​

While HAL is considered a strong contender due to its vast experience, its current production schedule is overloaded. The company is managing multiple high-priority projects, including the Tejas Mk1A and Mk2 fighters, upgrades for the Su-30 MKI fleet, and the production of Prachand combat helicopters.

Significant delays in these existing programs have raised concerns about HAL's capacity to handle the AMCA project alone.

Notably, the company failed to deliver any of the 83 ordered Tejas Mk1A jets by the initial March 2024 deadline, citing supply chain issues. This backlog has reportedly caused frustration within the IAF, which is grappling with a squadron strength of 31 against a sanctioned requirement of 42.

Speaking at Aero India 2025, IAF Chief Air Chief Marshal AP Singh expressed sharp disappointment over the Tejas delivery timeline, highlighting the urgency of diversifying India's defence production capabilities.

Private Sector Steps Up​

On May 27, 2025, Defence Minister Rajnath Singh approved an execution plan that formally mandates competitive bidding for the AMCA's prototype development and subsequent production. This allows private firms like L&T and TASL, as well as others, to bid for the contract either independently or as part of a joint venture.

The goal is to leverage private sector efficiency and innovation to meet an ambitious timeline, which targets the first prototype flight by 2031 and induction into the IAF by 2034.

Both L&T and TASL have developed significant expertise in the defence and aerospace domain.

L&T is a key supplier of critical systems for various defence programs, while TASL has a major partnership with Airbus to manufacture C295 military transport aircraft in India.

Their established capabilities in complex systems integration and large-scale manufacturing make them credible competitors for the AMCA program.

To combine expertise, a potential joint venture model has been proposed, which would see HAL holding a majority stake while private firms take on significant work packages.

However, experts have cautioned that for true innovation and efficiency, private industry may need a leading role to avoid the production bottlenecks that have affected past projects.

This competitive approach signals a new era for Indian defence manufacturing, aimed at building a more robust, capable, and self-reliant industrial base.

 

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[sanjay9negi]

HAL should also be privatized. Performance would shoot up.

 

[JB]

Meanwhile a joint team of military and defence officials from India is in G2G talks with Russia on refining the parameters of the sixth generation MiG-41 to render it suitable for its needs. It is believed that only a few will be needed to establish an aggressively dominant position in the Indian subcontinent within a short span of three years.

 

[sanket]

Eye-opener article for comedians! This will open the door for private players. Earlier, under the Special Purpose Vehicle (SPV) model, private players were not very interested in assembling fighters, but now it all depends on private players. They should not complain again that they haven't got a slice of the indigenous fighter project integration. Delivering a fast fighter jet under contract is important. Hope private players will not miss the opportunity and will grab it with both hands and contribute to the indigenous aerospace sector. Some comedians were earlier crying that private players were not allowed, but in fact, private players haven't shown much interest in the SPV model. That's another opportunity knocking at the door. Let's see how private players respond to it.

 

[abhinav srivastava]

Give Pvt companies some exposure. Let them start with trainer aircrafts.

 

[Somnath Sinhababu]

HAL has to stay as far as possible if the IAF needs AMCA near 2040. But still, the IAF needs stopgap purchases. The IAF needs more jets. The government should leave their 'Make in India', 'Atmanirbhar Bharat' bullshit aside. The IAF needs firepower. Sign the Rafale deal with France and the F-35 with the US. Three squadrons of F-35s and three more squadrons of Rafales will be a deadly combination along with some additional S-400s.

 

[Kirit Patel]

For Vajra, L&T provide best quality before time. So Trust Private player to do the Job.

 

[Kirit Patel]

Give Pvt companies some exposure. Let them start with trainer aircrafts.

Why do you think they can not do job for AMCA?

 

[SURESH RAO]

It will take at least 3 to 5 years for a private player to set up a manufacturing plant and then develop the expertise and complete ecosystem. After that, another 5 years for prototypes and testing. GOI should have done this kind of invitation around 5 years back.

 

[abhinav srivastava]

Why do you think they can not do job for AMCA?

They never ventured into jet manufacturing. They have no capability to do that. Tata has some experience for cargo jet assembly.

 

[Instant Karma]

HAL already has 10000 acre of land in it's Koraput Facility. AMCA can easily be built there. All these private sector companies will falter midway and at some point of time government has to intervene to revive the projects.

These private sector companies are notorious in doing fund diversion and misusing government funds.

 

[swatkats_razor]

They never ventured into jet manufacturing. They have no capability to do that. Tata has some experience for cargo jet assembly.

Nokia started life as a Tyre manufacturer before they ventured into manufacturing tecom equipments, wipro started as producer of Vegetable fat. Boeing itself started life as a producer of timber before it became Boeing. Japanese companies are a case-study in diversification of core industries.

Companies do not behave like people. Sometimes, they need to Run before they start to walk.

Let TATA and L&T decide how they want to enter the sector.

 

[Bks98]

India should follow the USA model. Let these companies (HAL, L&T, Tata, Adani, Reliance) create their own R&D like Boeing, Lockheed, Thales, etc., and manufacture fighter jets. The IAF will evaluate them, and whichever is suitable will be selected.

 

[kumar]

For Vajra, L&T provide best quality before time. So Trust Private player to do the Job.

If they rise up to the challenge, then good. Else, it will be a repeat of SPV episode where we lost years waiting for private sector to come forward.

 

[Prateek]

HAL should just sell its assets to L&T or outsource it's contracts to private firm for assembly yoo

 

[PARTHAJIT JANA]

This should be given to a private player consortium no matter what. If laws have to be broken for that, we should do that. Competitors of HAL must be established. Fear of losing business must be established among these PSUs and DPSUs, and the government should create a level playing field for them.

 

[Chandrasekhar Panda]

HAL should not be entrusted with fighter jet production anymore. It has not yet delivered a single Tejas Mark 1A even after a delay of more than two years. It should concentrate on the production of missiles and missile defence. A SPV model should be created for upcoming fighter jet production without further delay. Only God knows when HAL will deliver on time. The country's defence is at stake. The people will never forgive any shortcomings in defence preparedness.

 

[Mayank Kumar]

For Vajra, L&T provide best quality before time. So Trust Private player to do the Job.

Who did the actual R&D of Vajra? It's a Korean product. L&T did some manufacturing and assembly. That's it.

 

[Sandeep]

This is a good opportunity for the private sector to take control and manufacture a brand new advanced jet it India and for decades to come. We should also get several private sector companies to manufacture the jets as well and avoid relying on just one company because if something goes wrong then it leads to delays.

Also HAL is vastly overstretched with several projects that need manufacturing like the Tejas MK1A, MK2, basic trainer, intermediate trainer, advanced trainer, Dhruv, LUH, CATS, Super Sukhoi, Prachand etc so it’s got enough projects to sustain itself for the next 50 years.

 

[Enforcer]

Give Pvt companies some exposure. Let them start with trainer aircrafts.

Tata is making Apache helicopter's fuselage, C-130J's too and has already started work on upcoming C-295. They are not a new company.

They can handle it just fine. Trainer and helicopters can be give to a different private company. They should gut out entire production from HAL to private companies.

 

[Senapati]

Private companies like TAS LandT Reliance should be encouraged to entre into Aerospace domain.

 

[Hari Sud]

Going to private sector for AMCA is a better move for efficiently manufacture it together with two aircraft manufacturing companies in the country.

 

[Prof. Prodyut Das]

Unless the producibilty of the ADA designs are assessed along with the standard of technical excellence the AMCA will go the Tejas say. Perhaps the p vt sector may have second thoughts because AMCA won't work.