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HAL cuts its profit on Tejas Mark 1A deal by 50%, fighter jets to take to sky by 2022

Defence Ministry Wednesday gave green signal to the purchase of 83 Light Combat Aircraft Mark 1A Tejas from the Hindustan Aeronautics Limited at a cost of Rs 37,000 cr.

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New Delhi: The defence ministry Wednesday cleared the muchawaited deal for the purchase of 83 Light Combat Aircraft (LCA) Mark 1A Tejas from the Hindustan Aeronautics Limited (HAL) for a surprisingly low amount of Rs 37,000 crore as against the original value of the deal, which was pegged at around Rs 50,000 crore.

These 83 jets will come with more enhanced capabilities than the earlier 40 Tejas ordered by the Indian Air Force (IAF). These enhanced capabilities include not just better weapon systems but also mid-air refueling and Active Electronically Scanned Array (AESA) radar. 

This is the largest defence order placed by the Narendra Modi government under the ‘Make in India’ initiative.

“While orders of 40 Tejas aircraft had been placed with HAL in initial configurations, DAC (Defence Acquisition Council) paved the way for procurement of 83 of the more advanced Mark 1A version of the aircraft from HAL by finalising the contractual and other issues,” according to a statement by the defence ministry.

“The proposal will now be placed for consideration of Cabinet Committee on Security (CCS). This procurement will be a major boost to ‘Make in India’ as the aircraft is indigenously designed, developed and manufactured with participation of several local vendors apart from HAL,” the statement added.

The first LCA Mark 1A aircraft will be delivered to the IAF 36 months from the date of the contract.

ThePrint takes a look at how the Tejas Mark 1A will enhance the IAF’s capabilities.

Also read: HAL needs new orders to prevent complete halt of production after 2021-22

16 aircraft to be delivered every year

Defence sources told ThePrint if a contract is signed in the next three months, then the first flight of the Tejas Mark 1A will take place by the end of 2022 and the first squadron would be completed by 2024.

According to the plan, 16 aircraft are to be delivered every year.

“The relevant infrastructure has been put in place to ramp up the production to 16 aircraft per year. Once the contract is signed, work on procurement of supplies will start and the production will be geared up,” HAL sources said.

Significant works on the jets have been outsourced by HAL to companies like Larsen and Toubro (L&T), Dynamatic Technologies and Alpha Design.

The wings will be manufactured by L&T, while front fuselage has been outsourced to Dynamatic Technologies and the middle section to VEM. The rear section of the fighter has been outsourced to Alpha Design.

Contract likely to be inked next fiscal year

Defence sources said the actual contract for the Mark 1A Tejas is likely to be signed only in next fiscal year, starting 1 April.

This, sources said, was because the process of CCS clearance will take time and the fund allocation would be done through the new budget, which comes into effect from 1 April.

While initially the IAF wanted major capability enhancement in the Tejas and was looking at a significantly different aircraft LCA Mark 2, the Aeronautical Development Agency (ADA), the DRDO and HAL proposed the LCA Mark 1A in 2015.

So while the ADA focuses on the Tejas Mark 2, which falls in the category of a medium weight fighter, the IAF will induct the Mark 1A Tejas to deal with a depleting squadron strength.

The current squadron strength stands at 30 as against the sanctioned strength of 42.

Also read: Even after Rafale and other inductions, IAF will have only half of 42-squadron target by 2042

Better equipped

The 83 Tejas Mark 1A will be significantly better than the 40 Tejas Mark 1 that the IAF has ordered. They are already in the process of being manufactured and inducted into the IAF.

The significant difference between Mark 1 and Mark 1A Tejas is that the latter will be equipped with the Israeli Active Electronically Scanned Array (AESA) radar instead of the manually-scanned Elta EL/M 2032 radar, also Israeli.

While work is in progress on an indigenous AESA radar, Uttam, which is currently undergoing trials, the initial lot of the Tejas Mark 1A will come equipped with the Israeli technology.

The new Tejas will also have a Self-Protection Jammer (SPJ) on a pod under the wing.

Two other upgrades include improving the “maintainability” of the fighter and equipping it with external refuelling capability to allow it to cover a longer distance.

The Mark 1A will also be able to fire a variety of Beyond Visual Range (BVR) missiles and close combat air-to-air missiles. Sources also said the jets will be equipped with Vympel R-73 CCMs and a Derby BVR missile.

Efforts are also on to integrate the Brahmos NG with the jets.

Why the fall in price

The big fall in price from an estimated Rs 50,000 crore to just about Rs 37,000 crore is a direct result of a juggling exercise by the IAF, which cut down on its demand list, including spares, logistics support and other issues.

Also, the HAL was directed to cut down its earlier projected profit of 12 per cent to a little over 6 per cent.

These efforts led to a decrease in the price at a time the military is facing a huge budget challenge amid cash crunch.

Also read: DAC paves way for procurement of 83 indigenous Tejas fighter aircraft for IAF


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  1. How come the reduction of 13,000 crore out of a total of 50,000 crore is merely 6% ? Some detail is missing or maybe miscalculated. Thanks !

  2. The MiG-21s reached the end of their lifespan over two decades ago. That means: as of now, the MiG-21s are well past their retirement age and the IAF needs new jets.
    The US-made F-16s, which the Pakistan Air Force (PAF) uses, “have pretty advanced radars, navigation systems and other capabilities. Even in terms of range, the F-16s are better than the MiG-21s.”
    This makes induction of a modern fighter jet a pressing necessity. With plans to produce just 16 Mk-1As per annum, HAL can only make limited and insignificant contribution. It is evident that the IAF will have to induct appropriate foreign fighter aircraft.

  3. Since the Tejas Mk-1A will be equipped with the Israeli Elta AESA radar and EW suite, it is highly probable that the LCA will be armed with the Israeli Rafael I-Derby air-to-air Beyond Visual Range (BVR) missile and the Rafael Python-5 short range air-to-air missile. (The latter could replace the Russian Vympel R-73E CCM.)
    The Python-5 is one of the most sophisticated guided missiles in the world. It is currently the most accurate and reliable AAM of the Israeli Air Force. The Israeli Air Force plans to arm their Lockheed Martin F-35 Lightning II fighters also with Python-5 missiles.
    The Python-5 is a dual use missile suitable for air-to-air and surface-to-air missions.
    Both the Derby and Python-5 are used by the Indian Air Force, with the Israeli SPYDER quick reaction surface-to-air missile system, capable of engaging aircraft, helicopters, unmanned air vehicles, drones and precision-guide munitions.
    Elta was selected over two European defense contractors, Thales and Saab to supply the AESA radar.

  4. After the price of the advanced Mk-1A version of indigenously made LCA Tejas was,slashed by ₹ 18,000 crore, the Defence Ministry gave the green signal for the purchase of 83 Tejas Mk-1A Light Combat Aircraft from Hindustan Aeronautics Ltd, at a cost of ₹ 37,000 cr.

  5. HAL was permitted to get away with price gouging. It didn’t bother the govt. very much, because they got most of the money back as dividend.
    The govt. holds 89.97% stake in the defence firm, which was listed on the stock exchanges in March 2018.
    On Monday, March 16, HAL declared a whopping interim dividend of 333% or ₹ 33.25 per share of ₹ 10 face value for fiscal 2019-20. 

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