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.
