In a major decision aimed at boosting the domestic aerospace industry, India on Wednesday approved a much-awaited deal with Hindustan Aeronautics Limited (HAL) worth Rs 48,000 crore to procure 83 indigenously-developed Light Combat Aircraft (LCA) Tejas for the Indian Air Force.
The decision to procure the fleet was taken at a meeting of the Cabinet Committee on Security (CCS) chaired by Prime Minister Narendra Modi, Defence Minister Rajnath Singh said.
Touted as a ‘game changer’ for the domestic aviation industry, the news did provide a shot in the arm to HAL with its stocks surging by 10 percent on Thursday after the announcement of the deal. Singh commented that the move will strengthen government’s self-reliance programme Atmanirbhar Bharat while commenting on HAL’s capacity-building measures to ensure top of the line product. He said that 50 percent of the parts will be manufactured indigenously; this figure is expected to go up to 60 percent by the end of the programme.
R Madhavan, chairman and managing director of the HAL, said the production rate of Tejas is being augmented from eight to 16 aircraft per year through the creation of a new infrastructure in Bengaluru.
However, if the company’s track record is anything to go by, the schedule of deliverables should raise concerns and not the PSU’s capacity to manufacture it.
Long history with inordinate delays
The PSU was dragged into an unsavoury controversy over a deal with France’s Dassault Aviation to home-produce 108 of the 126 Rafale aircraft ordered by India. The negotiations finally fell apart for reasons unknown, with the NDA-lead government eventually buying 36 aircraft in fly-away condition and blaming the HAL for the soured deal.
Finance minister Nirmala Sitharaman had at the time insinuated that Dassault had refused to take responsibility of aircraft that would be produced by HAL. It insisted on signing separate contracts for 108 and 18 aircraft, India Today reported.
Stepping a little further back in time, HAL was facing criticism as its efforts to develop a basic trainer under the HTT 40 program was delayed by over five years. The HTT 40 was first promised in 2012 and the talk of procuring 106 units began in 2015. HAL rolled out the first prototype on 2 February 2016, and the production finally started only last year.
A deal for 106 aircraft was signed in August 2020, with the first batch of deliveries expected in 2022 and at least 70 aircraft expected by 2026, The Print reported. The second group of 36 aircraft will be procured after operationalisation of the HTT-40 within the Indian Air Force.