Government has issued a tender to three private sector-led bidders for development and production of advanced combat aircraft. Keeping HAL out of the process marks an inflection point. The aim now is to simultaneously broaden and deepen the domestic capabilities
India’s decision to open the Advanced Medium Combat Aircraft (AMCA) programme to private sector participation marks a consequential inflection point in the evolution of the country’s defence-industrial ecosystem. More than merely a procurement adjustment, it reflects a deeper strategic recalibration in New Delhi’s approach to military modernisation, technological self-reliance, and state-market relations in the defence sector.
In May 2025, the Ministry of Defence approved a new “Programme Execution Model” for the AMCA, India’s indigenous fifth-generation stealth fighter programme. Under this framework, the Aeronautical Development Agency (ADA), functioning under the DRDO, invited bids from Indian firms-public and private alike-for the development and manufacture of AMCA prototypes.
For the first time, India’s most ambitious aerospace programme had been opened to competitive participation on terms that placed private industry alongside, and in some respects ahead of, the traditional public sector establishment.
The response from industry underscored how profoundly India’s defence landscape has changed over the last decade. Companies such as Tata Advanced Systems, L&T, and Bharat Forge entered the fray through various consortia arrangements.
And now, in what may well prove to be a watershed moment for India’s defence-industrial trajectory, the ADA has issued a Request for Proposal (RFP) to three shortlisted bidders-all led by private sector players-for the development of prototypes of India’s fifth-generation fighter aircraft.
Significantly, state-run Hindustan Aeronautics Limited (HAL), long the dominant actor in India’s military aviation ecosystem, has been excluded from the bidding process. The Tata Group has entered the competition independently, while Bharat Forge is leading a consortium that includes defence PSU (DPS) BEML and private firm Data Patterns. A third consortium is being spearheaded by L&T in partnership with DPSU Bharat Electronics Limited (BEL) and private manufacturer Dynamatic Technologies.
The message from New Delhi is unmistakable: India is now willing to place its most ambitious strategic aerospace programme in the hands of a competitive and increasingly capable private sector, marking a decisive departure from the era of unquestioned public-sector primacy in defence manufacturing.
The Indian Air Force has repeatedly expressed concerns regarding delays in legacy procurement and indigenous production pipelines, particularly with respect to the Tejas Mk1A programme.
At one level, the move is a response to operational necessity. The Indian Air Force has repeatedly expressed concerns regarding delays in legacy procurement and indigenous production pipelines, particularly with respect to the Tejas Mk1A programme. India’s combat squadron strength continues to remain under pressure even as regional security competition intensifies. In this context, the government appears to have concluded that the old monopoly-driven model is no longer adequate for the scale and speed of capability generation that contemporary strategic realities demand.
The AMCA itself represents a leap in technological ambition. Conceived as a twin-engine stealth fighter with supercruise capability, advanced AESA radar, sensor fusion, internal weapons bays, and low-observable characteristics, the aircraft is intended to place India within the small group of states capable of producing indigenous fifth-generation combat platforms. The strategic implications are immense.
In an era where air power increasingly defines deterrence credibility, technological dependence carries serious geopolitical costs. India’s reliance on foreign suppliers-whether Russian, American, or French-has repeatedly exposed it to delays, conditionalities, and shifting geopolitical calculations. AMCA is therefore not merely an aerospace project; it is an assertion of strategic autonomy.
What makes this transition especially notable is the government’s willingness to disrupt entrenched institutional structures. For decades, India’s defence manufacturing ecosystem revolved around public sector dominance, with HAL occupying a near-monopoly position in aircraft production. The entry of private industry into the core of a strategic aerospace programme reflects a growing recognition that innovation and efficiency cannot emerge from protected structures alone. Competition is now being deployed as an instrument of reform.
This shift also reflects the maturation of India’s private defence industry. Over the past decade, firms such as Tata, L&T, Bharat Forge etc have accumulated significant experience through offset obligations, global partnerships, component manufacturing, and participation in “Make in India” initiatives. The AMCA programme effectively acknowledges that private Indian firms are no longer peripheral suppliers but potential system integrators capable of participating in complex strategic platforms.
Yet the risks remain substantial. Developing a fifth-generation fighter aircraft is among the most technologically demanding undertakings in modern industrial history. Even established aerospace powers have struggled with cost overruns, integration challenges, and technological bottlenecks.
Coordination between private manufacturers, ADA, DRDO laboratories, and foreign technology partners will require institutional coherence of a very high order.
Indian private firms may possess manufacturing depth and managerial agility, but they still lack HAL’s historical experience in full-spectrum aircraft integration and testing. Coordination between private manufacturers, ADA, DRDO laboratories, and foreign technology partners will require institutional coherence of a very high order. In that sense, New Delhi is undertaking what may best be described as a calculated gamble.
The broader strategic logic, however, is unmistakable. India is seeking to create a defence-industrial ecosystem that is competitive, technologically sophisticated, and globally relevant. The AMCA model may well become the template for future programmes involving advanced drones, next-generation armoured systems, aerospace platforms, and naval technologies. If successful, it would fundamentally alter the architecture of Indian defence production.
Equally important is the external dimension. The programme allows for carefully regulated collaboration with foreign original equipment manufacturers in critical areas such as engines, avionics, stealth technologies, and advanced materials. India is expected to rely initially on the GE F414 engine while pursuing indigenous propulsion capabilities over the longer term. This calibrated openness illustrates a distinctly Indian approach to strategic autonomy-one that does not reject foreign collaboration, but seeks to absorb external technology while retaining sovereign control over core platforms.
The opening of the AMCA programme to private competition may come to be viewed as one of the most consequential defence reforms undertaken by India in recent decades. It signals that New Delhi is prepared to move beyond the certainties of public-sector dominance in pursuit of a more dynamic and innovation-driven military-industrial base. The stakes are exceptionally high. Success would accelerate India’s transition from one of the world’s largest arms importers to a credible aerospace and defence technology power. Failure, on the other hand, would reinforce long-standing doubts about India’s ability to execute complex indigenous programmes at scale.
The AMCA programme, therefore, is not only about building a fighter aircraft. It is about testing whether India can build the institutional and industrial foundations necessary for great-power status in the twenty-first century.
This commentary originally appeared in Moneycontrol.
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Professor Harsh V. Pant is Vice President at Observer Research Foundation, New Delhi. He is a Professor of International Relations with King's India Institute at ...
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