Private Sector Hesitation Leaves Govt to Steer India's AMCA Jet Program

India's ambitious Advanced Medium Combat Aircraft (AMCA) program, aimed at developing a 5th generation fighter jet, has hit a snag due to reluctance from private companies to take on a major role.

The Ministry of Defence's proposal for a Special Purpose Vehicle (SPV) model, with private companies holding a majority stake and managing production and the supply chain, has not garnered the expected enthusiasm. Private aerospace companies are wary of the long development timelines associated with advanced fighter jet programs, citing concerns over the investment risk.

While expressing interest in participating at a later stage when the aircraft design is finalized and orders are confirmed, companies are cautious about investing heavily in a project that might take years to yield results.

A significant concern is the size of the Indian Air Force's (IAF) order, with private companies indicating that a larger order of around 200 AMCA MkII jets is needed to ensure commercial viability and a healthy return on investment.

Private companies are, however, open to contributing to the AMCA program by participating in the supply chain, manufacturing key components like fuselages and electronic systems.

With private sector hesitation, the AMCA program is likely to remain primarily under government control, with the Aeronautical Development Agency (ADA) and Hindustan Aeronautics Limited (HAL) taking the lead. The possibility of increased private sector involvement may hinge on the IAF increasing its order for AMCA MkII jets.

 

[Franklin D'souza]

I am truly disappointed. Mahindra and Tatas have good design centers under Aerospace. I would have hoped they would have taken this risk.

 

[Aloo]

In any private company, when a product is being developed specifically for one single client, then that client always pays advance. This is true for something as simple as dyed cloth to as complex as a satellite. And it's true for defense industries as well, globally.

Question is why pvt company get funds like DPSU without giving control to GoI like DPSU?

Topic hi badal diya kuch bhi bolne ko 🤡

Talking vague like cloth or satellite to run from answering on AMCA ?

Pvt doesn't want to come due to lack of definate orders. When there are no orders, from where does advance payment came in picture 🤡

Wow Akshat wants advance payment but doesn't want private companies to invest in SPV 🤣🤣🤣 when GoI will burden most cost of development and still give Pvt sector majority stake just for ₹2500 crore which will be further reduced by ₹1000 crore by using HAL Nashik plant.

 

[Akshat]

Question is why pvt company get funds like DPSU without giving control to GoI like DPSU?

Topic hi badal diya kuch bhi bolne ko 🤡

Talking vague like cloth or satellite to run from answering on AMCA ?

Pvt doesn't want to come due to lack of definate orders. When there are no orders, from where does advance payment came in picture 🤡

Wow Akshat wants advance payment but doesn't want private companies to invest in SPV 🤣🤣🤣 when GoI will burden most cost of development and still give Pvt sector majority stake just for ₹2500 crore which will be further reduced by ₹1000 crore by using HAL Nashik plant.

Whenever you are given examples they seem vague to you.

The question being discussed here is why should private sector get funds from GoI for R&D. My answer is that whenever a development is being done specifically for one client, like in case of AMCA, then the client shall bear the cost of development and pay it in advance. That's the industry standard. For this the company doesn't give equity.

Now coming to SPV. I gave you direct evidence. ACM Bhadoria's interview. There is no tender so how can the private sector invest?

And please show the proof for the 2500 crores and 1000 crore values.

 

[Kunung]

It will remain Govt led untill Ambani or Adani companies gain expertise. When they do, everything will go to only those two companies.

 

[Tanishq Bafila]

JV is mainly between Hal & Private company. The SPV will use HAL facility, private sector is not expected to make any.

Pvt is asked to do below mentioned things:

1. Manage project to eliminate bureaucracy at every step
2. Invest ₹2500 crore (Acc to year 2020-21)
3. Participate in structural development, testing
4. Their main aim is manufacturing

₹2500 crore will be significantly reduced by using HAL Nashik plant as proposed by HAL.

Even this facility is needed only when serial production starts, prototype will be fabricated at existing (Not even Nashik but Banglore) facilities & tested at HAL airport. Your claim of 5 year idle facility is idiotic, as it will be made only after testing is complete.

IP is not given even by foreign companies in MRFA Or any other project, it's not an issue. Development fund will be given by GoI anyway.

Risk is associated in product, it's the company's decision to take or not. None to blame.

Yep , there are two provisions one is to use the existing facility of DPSUs and other is to make their own facility by scrath.. See to be honest I have zero confidence in private companies other than TATA technologies but I was suprised when last year reports were coming that not even TATA is intrested.

2500crore is not that much big amount when you are talking about manufacturing of 150+ 5th generation jet ( Mk1 & mk2 ) ... Not to forget they will get technology technology without any hurdles from DPSUs and that's is something big...

UTTAM is ready with 900+ TR modules , Engine will be imported for the Mk1 batch , We are currently making our own EW suit , avionics , missiles , Indigenous cockpit systems and what not... And those who say that AMCA will fly by 2040 is just nonsense...

Just see the progress of various systems then they should comment. Though it will take atleast 4 years of testing

 

[Aloo]

Don't do gol mol. Condition is Private sector has to invest with no guaranteed orders. They can join if they agree. Why will IAF change condition for Private company to commit gurantee of order?

There is no tender so how can the private sector invest?

If tenders matter so much to you then why discuss?

And please show the proof for the 2500 crores and 1000 crore values.

These are expected numbers on news articles as official documents are not released. Neither did I claim to be exact. So why are you asking proof ?

RKS Bhadoria said many things which are you talking about? Him blaming ADA as you said in another thread is not true.

 

[Aloo]

Yep , there are two provisions one is to use the existing facility of DPSUs and other is to make their own facility by scrath.. See to be honest I have zero confidence in private companies other than TATA technologies but I was suprised when last year reports were coming that not even TATA is intrested.

2500crore is not that much big amount when you are talking about manufacturing of 150+ 5th generation jet ( Mk1 & mk2 ) ... Not to forget they will get technology technology without any hurdles from DPSUs and that's is something big...

UTTAM is ready with 900+ TR modules , Engine will be imported for the Mk1 batch , We are currently making our own EW suit , avionics , missiles , Indigenous cockpit systems and what not... And those who say that AMCA will fly by 2040 is just nonsense...

Just see the progress of various systems then they should comment. Though it will take atleast 4 years of testing

Yes. The thing is AMCA is business. Like any business it has risk associated.

Now it's up to private company to take decision whether to join or not. They can surely bargain in their favour, it's their right. But if they join it's joint risk.

Private companies led by mature businessmen understand this, but some people here blindly want private based on preconceived notions.

I would personally like a pvt company to lead but it's up to profits. 🤑🤑

 

[Akshat]

Don't do gol mol. Condition is Private sector has to invest with no guaranteed orders. They can join if they agree. Why will IAF change condition for Private company to commit gurantee of order?

If tenders matter so much to you then why discuss?

These are expected numbers on news articles as official documents are not released. Neither did I claim to be exact. So why are you asking proof ?

RKS Bhadoria said many things which are you talking about? Him blaming ADA as you said in another thread is not true.

"GoI will burden most cost of development and still give Pvt sector majority stake just for ₹2500 crore which will be further reduced by ₹1000 crore by using HAL Nashik plant." - Your own exact words. Now please show the proof. Nowhere is it written that this is not an official number. You have indeed claimed that this is exact.

"If tenders matter so much to you then why discuss idiot?" - Ain't we all here to discuss? If you are spreading a lie, why won't I come and reveal your lies?

And regarding the first paragraph. I ask again. Why shouldn't private sector ask for either guaranteed orders or funds for R&D? The product is being developed specifically for Indian military and hence the developer has full rights to ask for upfront payment. That's the industry standard for all tailor made products across the industry. In fact, even Indian Army does that. It is being done in FICV, as well as with drones (Mehar baba competition, for example). We also did it for the ISE of Rafale. We were also doing it for FGFA. So why not for AMCA? You should in fact answer why this shouldn't be done when it is the industry standard.

 

[Kush Kashyap]

Pvt corporation don't have r&d first give them Tejas mk2 to produce along with hal after that they can work in AMCA mk1 for mk2 both hal and Pvt company will need to do r&d and produce and so on for 6th gen fighters

 

[Pad UwU]

Private sector are correct, they don't want to risk it's company's future to a high failure venture if it's partner (GoI+ it's research department) can't assure a future proof plan and obligation to further sign it's order will still be implemented whatever it takes.... Yeah sure private sector are more willing to do screwdriving contract than risking full fledge manufacturing to order hightech machineries, training people, ordering material resources and many that will be stuck in warehouse if the government goes 360° turn to it's contract with them😹😹😹

AMCA on paper is like a sinking ship without a proper ship design, captain, navigator and crew plus enough funding to sail in high seas🙃🌞

 

[Rajsm]

Pvt players are more Interested in Copy paste work so that they can get good return & safe Business.

They are probably afraid of trusting the DPSU's. Look at DRDO and HAL's track record