HAL, private firms to compete for Amca prototype contract: Defence ministry

Business Standard

27-05-2025

In a move that could end state-run Hindustan Aeronautics Limited's (HAL's) monopoly in building fighter jets, the Ministry of Defence (MoD) on Tuesday said the country's private and public defence companies would get equal opportunity and compete to develop the prototype of the indigenous fifth-generation stealth fighter, dubbed the Advanced Medium Combat Aircraft (Amca).
This follows the execution model approved for the Amca programme by Defence Minister Rajnath Singh on Tuesday. The programme will be implemented by design agency Aeronautical Development Agency (ADA) through industry partnership.
Describing the approval of the execution model as a significant push towards enhancing the country's indigenous defence capabilities and fostering a robust aerospace industrial ecosystem, the MoD said the approach would provide 'equal opportunities to the private and public sectors on a competitive basis'. Private and public defence players can bid to participate in the Amca development programme independently, as a joint venture (JV), or as consortia. The bidders should be Indian companies compliant with the laws and regulations of the country, the ministry added.
'This is an important step towards harnessing indigenous expertise, capability, and capacity to develop the Amca prototype, which will be a major milestone towards aatmanirbharta in the aerospace sector,' said the MoD. The ADA will shortly issue an expression of interest for the development phase of the fifth-generation, medium-weight fighter aircraft, which has been designed to perform both air-to-air and air-to-surface combat, it added.
The first flight of the Amca prototype is expected by end-2028, a defence source told Business Standard.
This execution model marks a shift from longstanding convention, under which HAL was the default domestic production agency for combat aircraft, making it the only Indian entity to manufacture such platforms in the country so far, according to a defence industry insider who did not wish to be named. 'Now, it will have to bid alongside private firms to secure the contract. This will foster competition and offer private players a unique opportunity,' the person said, adding private defence majors like Kalyani Group, Larsen & Toubro, the Tata group, and Adani Group would be interested in securing the contract to build the prototype.
'Even if the winning entity is a JV or consortium involving HAL and one or more private players, the latter will play a far larger role in building combat aircraft than they have before,' explained the source quoted earlier. So far, private players have only built components and parts for programmes like the Light Combat Aircraft Tejas in a tieup with HAL.
In March, contracts for 156 Prachand light combat helicopters were awarded to HAL, in the largest order ever secured by the Bengaluru-based public-sector aerospace and defence firm until then. The Rs 62,700 crore (excluding taxes) deal alone accounted for about 37 per cent of the Rs 1.69 trillion worth of contracts awarded by the MoD to the domestic industry in 2024-25. 'If the private sector secures the contract to build the Amca prototype, it could open the door to contracts matching the scale of those so far awarded only to public-sector entities like HAL,' said another industry source who did not wish to be named.
In February, the HAL leadership indicated that the company's order book was expected to reach Rs 2.5 trillion in 2025-26.
The timely induction of the twin-engine Amca has become crucial, with China expanding its arsenal of operational fifth-generation stealth fighters and making visible progress in developing even stealthier sixth-generation jets — an area in which it is now challenging the hitherto global leader in such technologies, the United States (US). Meanwhile, Pakistan is reportedly expected to acquire about 40 Chinese stealth fighters, with deliveries possibly starting as early as 2026.
In March last year, the Cabinet Committee on Security cleared the project to design and develop the Amca. The jet, intended to evade enemy radar and feature advanced sensors and electronics for secure, real-time information sharing with other aircraft and systems, has been under development in a project worth around Rs 15,000 crore.