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Why Chinese aerospace giant AVIC, at risk of US sanctions, is a challenge for India

Defence experts say AVIC is a huge company that makes a plethora of equipment and is self-reliant, which is a challenge, given India’s LAC stand-off with China.

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New Delhi: Aerospace giant Aviation Industry Corporation of China (AVIC) finds itself in the spotlight after news agency Bloomberg reported that it could be the next target of a United States crackdown.

The state-owned conglomerate, which has 100-plus subsidiaries and 450,000-plus employees — reportedly more than aerospace giants Boeing and Airbus combined — has over the years manufactured fighters, attack helicopters and transport and surveillance planes. Some of these were put on air display at the 70th anniversary celebrations of the Communist Party’s rule in China last year.

In June, the US put AVIC in a list of firms controlled or owned by the People’s Liberation Army, but the Bloomberg report said AVIC could join Huawei Technologies, ByteDance’s TikTok and Tencent Holdings’ WeChat as a target for US sanctions.

AVIC’s prowess is not just limited to military aircraft. The company’s website also details its other businesses, including making airliners and private jets with parts manufactured in joint ventures with American companies. It has diversified and expanded into finance services, automobiles, construction of airports, railroads and bridges etc. too.

At a time when India is locked in a stand-off with China at the Line of Actual Control in eastern Ladakh, multiple defence experts ThePrint spoke to said AVIC is a challenge for India due to its sheer size and the plethora of equipment it manufactures, and its self-reliance in defence technology.

ThePrint delves deep to explain what AVIC does, the story of its growth, the possible relevance of US sanctions, and how AVIC affects India.

Also read: ‘Make in India has failed in defence sector’ — experts highlight importance of self-reliance

AVIC’s military development

AVIC, in its current form, came into existence in 2008 through the restructuring of the China Aviation Industry Corporation Ι (AVIC Ι) and the China Aviation Industry Corporation ΙΙ (AVIC ΙΙ).

The burgeoning AVIC has, over the years, developed a range of fighters, choppers, transport and surveillance aircraft, aside from a range of unmanned aerial vehicles (UAVs) or drones in recent times.

Some of the most well-known aircraft and equipment manufactured by AVIC and its subsidiaries include the J-20, J-10, JF-17 and FC-31 fighters; the Y-20 and Y-9 transports; the Z-9, Z-10, Z-19 and Z-20 helicopters; the PL-5, PL-9 and TY-90 missiles; the LS-6 bomb and the Wing Loong I & II drones.

The key AVIC machines in China’s PLA Air Force (PLAAF) include the J-20 stealth fighter and the Z-19E attack helicopter.

The Chengdu J-20, also known as ‘Mighty Dragon’, is a single-seat, twin-jet, all-weather, fifth-generation fighter aircraft that has stealth capabilities. Meanwhile, the AVIC’s website describes Z-19E as a dedicated attack helicopter which can be stored with advanced anti-tank missiles, air-to-air missiles, aerial rockets, and can attack enemy ground targets such as tanks, armoured vehicles and enemy air targets.

ThePrint had also reported about China’s indigenously developed military transport aircraft, the Y-20, which is being built in significant numbers. The strategic location of these aircraft at Qionglai — an important strategic transport airbase — gives China exceptional aerial capabilities against India.

Another aircraft AVIC makes is the JF-17, a light multi-role fighter jointly developed by China and Pakistan, which is equipped with beyond-visual-range (BVR) air-to-air missile capability as well as air-to-surface attack capability.

AVIC’s inventory also has a range of UAVs such as Harrier, SW1, Nighthawk for intelligence surveillance reconnaissance (ISR) roles and other activities. Wing Loong I & II can also be used as combat drones UCAVs.

Also read: Apart from FDI limit increase, Modi govt’s defence reforms won’t boost ‘Make in India’

How India stacks up against AVIC equipment

India’s answer to the JF-17 is the indigenously developed Light Combat Aircraft ‘Tejas’, which has been inducted into the Indian Air Force (IAF). However, the force is yet to place an order for 83 of these aircraft that it plans to buy.

Another indigenously developed machine inducted into the IAF is the Advanced Light Helicopter ‘Dhruv’, while the Light Combat Helicopter was also recently tested at Leh.

On the development front, India’s AMCA (Advanced Medium Combat Aircraft) programme — a fifth generation-plus fighter — is expected to take seven years, though the IAF has planned two squadrons of the AMCA Mark 1 and five squadrons of the AMCA Mark 2.

A senior IAF officer said that the AVIC is bigger than some of the best known defence companies of the world combined, and India has a long way to go to match it.

“The sheer size can’t be matched by any other organisation. In terms of indigenous defence technology, India has achieved some, but it will take some time to reach China’s level, because they have invested heavily on defence production through the AVIC,” the officer said.

The officer said self-reliance in defence technology is achieved by very few countries, such as the United States, France and Russia, and China has virtually reached that point through the AVIC, though it still lacks in certain core technologies.

“During a war, it is self-reliance which matters, as a country is not dependent on anyone. India has started on that, but there is a long way to go,” the officer said.

“Availability of spare parts and capabilities to replace machines are of vital importance to sustain in a war, and your indigenous industries play a big role in that,” he added.

“AVIC has multiple subsidiaries which can make multiple custom-made products for China based on its immediate requirements. So, it is something India should watch out for in the years to come,” the officer added.

Another senior IAF officer told ThePrint that technology is the game-changer in the modern battlefield. “India and China have been at loggerheads since April, so the looming fear of US sanctions on AVIC would add to the international pressure to curb Chinese intrusion in technology and industry,” the officer said.

“Most of the weapons are being manufactured by AVIC and its subsidiaries in-house, with little assistance from outside. The effect on AVIC due to US sanctions can be understood only once sanctions are imposed and the future of existing projects is defined,” the officer added.

A third senior IAF officer said aircraft engine manufacturing technology is limited to a few countries because of the superior metallurgy required, and the complexity of manufacture and R&D. India’s Kaveri engine programme was also stalled because of technological hurdles.

What India needs to do

Vishal Nigam’s book Dragon in the Air, which talks about the transformation of China’s aviation industry and the PLAAF, states that a few experts have described the evolution of China’s aviation industry as the third leg of the world’s aviation industry after America and Europe.

Nigam says the reasons attributed to the high growth trajectory and quick turnaround of AVIC include availability of capital for weapons acquisition, “spin-in benefits” from the commercial aviation sector, and integration into the global production chain.

“The basic tenet that emerges vests on building a civil aviation sector which would in the future be capable of augmenting the PLA’s requirements, not through ‘conversion’, but through a process of integration,” Nigam notes in the book.

“These factors largely provide a framework for assessing the effectiveness of reforms and strengthening China’s indigenous defence capabilities.”

Jayadeva Ranade, former member of the National Security Advisory Board, told ThePrint that AVIC has a lot of cash, and despite Covid-19, the shares of state-owned defence enterprises went up because of the demand.

Ranade, who heads the Centre for China Analysis and Strategy, said the US sanctions applied on military technology and Chinese tech companies like Huawei are affecting laser imaging and production of microchips, among other things.

“So, manufacturing of high-end military equipment — such as guidance systems and radars — by AVIC would be also affected by sanctions on the purchase of microchips etc.” he said.

Asked for his opinion on how India stacks up against AVIC equipment, Ranade said while a lot of service officers say its aircraft are not of good quality, India should be concerned.

“Their aircraft technology can’t match Western aircraft. But India has a limited capacity to manufacture, and that is a cause for concern for India,” he said.

“The Chinese thinking is on the lines of swarm technology. Even if you have 100 aircraft, they will think of manufacturing 500-600 aircraft in one go,” Ranade added.

Also read: 7 big-ticket ‘Make in India’ defence projects that have failed to get off the ground


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  1. “India’s AMCA (Advanced Medium Combat Aircraft) programme — a fifth generation-plus fighter — is expected to take seven years…”

    Its a tall challenge for India’s indigenous 5G+ fighter when 3G-Tejas took 30yrs with full external help. After 7rs, China’s 6G fighter may be ready.

    Even Russia failed to make 5G stealth fighter. USNato considered non-stealthy SU57 as 4G+. So has EU & Fr failed to make one.

    Jp gave up its X1 5G program after decades of failure. US is now offering F21 for Jp indigenous 5G aspiration, a modified F18.

    SK-Indonesia alliance gave up within 1yr after unable to even define 5G fighter specifications.

  2. The end of this is very clear.

    India and China will mutually destroy.

    USA will win without making their home a battleground, without harming any US citizen.

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