Defence Ministry inks ₹62,370 crore contract with HAL for 97 Tejas Mk1A light combat aircraft for Indian Air Force

The Ministry of Defence said on Thursday that it has signed a contract with Hindustan Aeronautics Limited (HAL) for the procurement of 97 light combat aircraft—including 68 fighter jets and 29 twin-seaters—for a whopping ₹62,370 crore, exclusive of taxes, for the Indian Air Force.

The delivery of these aircraft is expected to begin in 2027-28 and be completed over a period of six years.

The aircraft will feature over 64% indigenous content, with 67 additional components, exceeding the previous light combat aircraft Mk1A contract signed in January 2021. The integration of advanced, domestically developed systems such as the UTTAM AESA Radar, Swayam Raksha Kavach, and control surface actuators will further strengthen the Aatmanirbharta initiatives.

The project is backed by a strong vendor network of nearly 105 Indian companies directly involved in manufacturing detailed components. The production is expected to create approximately 11,750 direct and indirect jobs annually over a six-year period, providing a substantial boost to the domestic aerospace ecosystem.

The acquisition, under the ‘Buy (India-IDDM)’ category of Defence Acquisition Procedure 2020, aligns with the Government’s focus on indigenisation. The light combat aircraft Mk1A is the most advanced version of the indigenously designed and manufactured fighter aircraft and will serve as an effective platform to fulfill the operational needs of the IAF.

HAL shares closed 1.1% higher on Thursday at ₹4,776 apiece.

In August, the Union Cabinet cleared the ₹62,000 crore deal for the procurement of Tejas fighter jets. This is the second major order for the Mark 1A variant, adding to a previous order of 83 aircraft (including 73 fighters and 10 trainers) valued at around ₹48,000 crore. The Mark 1A is an advanced version of the Tejas, incorporating upgraded avionics, radar systems, and enhanced combat capabilities compared to the earlier Tejas Mk1.

As of June 30, HAL’s order book stood at over ₹1.89 lakh crore, which included significant contracts for the LCH “Prachand” and the Tejas Mk1A. The LCA Mark 1A fighter jets are part of India’s indigenous defence programme, crucial for replacing the ageing MiG-21 fleet that the Indian Air Force will phase out this month, after six decades of a chequered legacy.

In the aftermath of Operation Sindoor, the Indian Air Force is focusing on quickly rebuilding its squadron strength. Given HAL’s long history, its involvement in designing and developing all upcoming indigenous platforms, coupled with policy tailwinds, bodes well for its growth prospects, according to a recent report by domestic brokerage firm Anand Rathi.