India’s AMCA is a chance to break HAL’s monopoly and finally build an aerospace ecosystem

Representational image | India’s Advanced Medium Combat Aircraft (AMCA) | X/@DefenceMinIndia

India is preparing to launch its most ambitious aerospace programme yet, the fifth-generation Advanced Medium Combat Aircraft. The challenge is no longer just designing the AMCA; it is choosing who should build it. In this context, Hindustan Aeronautics Limited Chairman and Managing Director DK Sunil’s recent interview with Business Standard offers more than a routine corporate update. It reveals the institutional mindset of India’s largest defence Public Sector Undertaking and its resistance to competitive integration. Sunil’s central claim that India does not need another fighter jet integrator should not be mistaken for strategic realism. It is, instead, a warning bell.

At stake is not just another fighter jet, but India’s pathway to building a globally competitive, innovation-driven defence aerospace ecosystem. And that journey cannot proceed if HAL remains both gatekeeper and default beneficiary, while the Ministry of Defence (MoD) continues to play the role of a passive monopsonist.

Meanwhile, China has rapidly scaled its indigenous aerospace capabilities by nurturing multiple parallel programmes, from the J-10 and J-16 to the fifth-generation J-20 and the carrier-based J-35/FC-31, through a mix of centralised vision and decentralised execution. Even Pakistan, with far fewer resources, has co-developed the JF-17 with China, and is now inducting more advanced variants with indigenous inputs. These examples reflect the strategic dividends of diversified industrial capacity and risk-sharing.

Pakistan is also exploring collaboration with Turkey, whose TF-X (Kaan) fifth-generation fighter is progressing under Turkish Aerospace Industries. While Pakistan’s Project Azm remains aspirational, Ankara has emerged as a co-development partner across multiple domains, including UAVs and simulators. Pakistan’s outreach signals its intent to pursue a multi-faceted industrial strategy, integrating Chinese platforms with emerging Turkish partnerships.

India, by contrast, continues to rely on a single PSU integrator, raising questions about the adaptability and resilience of its aerospace model.

Is HAL a prime contractor or an industrial department?

Despite its scale, HAL functions more like an industrial arm of the Indian government than a true ‘prime-contractor’. Global primes, such as Lockheed Martin, Dassault, or Korea Aerospace Industries, lead from the front: they own design IP, assume technical and financial risk, manage global supply chains, and remain accountable to both domestic and export customers.

HAL, by contrast, operates under government protection, executes pre-funded programmes, and relies on design authorities like the Aeronautical Development Agency (ADA) or foreign OEMs for critical IP. It faces no real competition, has limited export exposure, and avoids performance-linked risk due to its structural insulation. In effect, HAL remains a delivery node within a protected procurement pipeline, not a market-facing, innovation-driven aerospace prime.

The Medium Multi-Role Combat Aircraft (MMRCA) programme exposed HAL’s limitations. Dassault, selected to supply 126 Rafales, refused to accept HAL as a license producer without control over production quality and timelines. India wanted Dassault to be accountable (akin to a prime) without granting authority, a contradiction that made the deal untenable. The programme collapsed, and India eventually bought 36 flyaway Rafales from France. Even trusted partners hesitate to rely on HAL for complex fighter integration, not due to malice, but due to structural inefficiencies.

The monopoly-monopsony trap: Scale, distortion, strategic risk

The HAL chief’s claim that India’s Tejas Mk1A, Mk2, and AMCA orders over 30 years don’t justify a second integrator rests on flawed arithmetic. It reduces the strategic rationale for diversification to a question of volume, ignoring the more profound truth: competition builds resilience, not redundancy.

Industrial scale in aerospace isn’t just about numbers. It’s about throughput, maturity, and cost-efficiency through repeated, distributed production. Global primes succeed when they can amortise costs across hundreds of platforms, whether single-type (like the F-35) or via diversified workshare (as in Airbus or Boeing). India’s current model concentrates HAL at the centre while spreading volumes too thin to drive down cost or attract serious private investment in Tier-1 capacity.

India’s inability to scale successful platforms like the LCA and ALH is a red flag. This failure has led to another distortion: supply-side-driven inductions. Successive governments have nudged the Indian Navy to accept HAL-developed platforms, not because they meet operational benchmarks, but to keep production lines running. Such approaches undercut user-driven capability development and operational imperatives, reinforcing the need for structural reform, not just patriotic procurement.

Without committed production scales, indigenous design efforts remain boutique experiments. For foreign OEMs, this lack of scale undermines India’s credibility as a license producer or collaborative builder. No serious partner will risk IP or joint development without shared control and credible volume.

Global benchmarks: How others built aerospace power

Even countries with smaller defence budgets than India, like Israel, support multiple aerospace firms (Israel Aerospace Industries, Rafael, Elbit) that thrive on innovation, strategic partnerships, and export orientation. France backs both Dassault and Airbus through modular co-development and shared ecosystems. The United States maintains Boeing, Lockheed Martin, and Northrop Grumman in deliberate competition, treating capability redundancy as a strategic asset.

Europe’s Eurofighter Typhoon programme strikes a balance between sovereign control and shared industrial innovation. The Future Combat Air System (FCAS) and Global Combat Air Programme (GCAP) further reflect a global trend towards co-development and layered industrial workshare. Even Sweden’s Gripen E/F-series fighter aircraft, in collaboration with Brazil, shows that modest domestic demand can still yield world-class platforms when design and cooperation are aligned.

On a similar scale to India’s, South Korea’s KF-21, Turkey’s TF-X, and Japan’s F-X fighters demonstrate that aerospace ecosystems thrive when private or hybrid integrators are empowered. In each case, capability-building is a priority over monopoly.

India’s repeated failure to build an aerospace ecosystem

India had a chance to break this monopoly model in the 1980s. Then DRDO chief VS Arunachalam proposed a public-private partnership for the LCA, involving Tata Sons and Commodore Arogyaswami Paulraj, as co-lead (now at Stanford and famous for MIMO antenna systems that power our wireless world). However, the system defaulted to state dominance, with ADA as the designer and HAL as the builder. That PPP vision, and a shot at a plural, innovation-driven ecosystem, was quietly laid to rest.

Today, continuing to concentrate on integration within HAL is not only inefficient but also undermines our strategic ambitions.

A promising opening, but will it survive HAL’s resistance?

To its credit, the Indian government has shifted gears. In 2023–24, the MoD and ADA invited private firms to compete as AMCA integrators. Tata Advanced Systems, L&T, Adani Defence, and Bharat Forge expressed interest. ADA would retain design authority, while HAL and private firms compete for production, a structure mirroring global best practices.

But HAL’s reaction, including public complaints about scoring “zero out of 100” on a critical parameter, suggests it is resisting this opening. It wants to reassert its gatekeeping role, which is not a sign of confidence, but of institutionalised privilege.

Subcontracting is not ecosystem building

HAL often cites its vendor base of 6,500+ suppliers and growing private involvement in the Tejas Mk1A. Yet, integration, IP control, and testing remain with HAL. That’s subcontracting, not ecosystem development.

Globally, aerospace systems are modularised, with specialist firms integrating and certifying subsystems like avionics or flight software. These firms are trusted not just to build, but to deliver. India has the talent. It needs to trust it.

India must empower private firms with full integration mandates, testing, certification, and programme management, if it wants them to rise beyond Tier-2 status. Without this leap, India cannot build the kind of agile, scalable defence ecosystem needed for future conflicts. That model cannot deliver the pace or adaptability India needs for future battlespaces.

The goal must be not to displace HAL, but to prevent AMCA from being locked into a single-node production model.

Building an aerospace ecosystem: What needs to change

To achieve success with AMCA and join global aerospace leaders, India must enact the following strategic shifts:

• End HAL’s integration monopoly: Select the AMCA integrator on merit, not entitlement. HAL should compete on equal terms.
• Empower ADA/NFTC as an autonomous design/flight testing authority: Grant ADA and the National Flight Testing Centre (NFTC) full institutional autonomy to function as sovereign design and flight test authorities, free from operational subordination to HAL or any other PSU
• Create a joint venture/SPV: ADA, General Electric Aerospace (as potential engine supplier for initial AMCA Mk  1 units), and the selected integrator should co-anchor AMCA development to streamline workshare, secure funding, and protect intellectual property.
• ADA’s monopoly as a design agency also warrants scrutiny: Countries like the U.S. and South Korea encourage competing design ecosystems, ranging from defence labs to private bureaus, which foster innovation and agility. India needs similar mechanisms to push ADA toward open, iterative design practices.

India must choose ecosystem over entitlement

India has paid a steep price for HAL’s unchecked dominance, evident in the MiG-era overhauls, the decades-long Tejas saga, and the troubled ALH programme. These are not isolated episodes; they reflect deeper systemic risks tied to monopoly control.

The AMCA programme offers a rare opportunity to course-correct, not just technically, but institutionally as well. HAL’s assertion that a second integrator is unnecessary is not a strategic judgement; it is institutional self-preservation. Nations build aerospace power by fostering competition, accelerating timelines, and scaling industrial ecosystems, not by sheltering incumbents.

Notably, the MOD has signalled its intent to shift this paradigm. In a public statement (Business Standard, July 8, 2025), Defence Secretary Rajesh Kumar Singh confirmed that a level playing field is being created for private firms to compete for AMCA integration. This policy shift mirrors earlier reforms in shipbuilding and land systems, and must now be followed by precise structural execution. What’s needed is not just a level playing field, but a full runway, one that allows India to build, scale, and sustain a resilient aerospace base.

Let the best builders lead. Let the strongest ecosystems grow. Private sector entry into AMCA must be viewed as a strategic necessity, central to national capability, rather than just an expansion of the vendor list.

The author is a former Flag Officer Naval Aviation, Chief of Staff at the integrated HQ Andaman and Nicobar Command, and Chief Instructor (Navy) at DSSC Wellington. He tweets @sudhirpillai__

Views are personal.

(Edited by Prashant)