Just ahead of a crucial pre-Expression of Interest (EOI) meeting scheduled for Friday, private aerospace firms have raised concerns that the bidding process for India’s Advanced Medium Combat Aircraft (AMCA) prototype development is heavily skewed in favour of state-run Hindustan Aeronautics Limited (HAL).
The EOI, issued by the Aeronautical Development Agency (ADA) on June 18, was hailed as a transformative step in India’s defence procurement landscape. For the first time, HAL would be required to compete alongside private companies to win the contract to manufacture India’s fifth-generation fighter jet. The Ministry of Defence had earlier announced that both public and private sector companies could bid independently or as joint ventures or consortia.
However, private sector stakeholders allege that the eligibility criteria and scoring system outlined in the EOI create a playing field that overwhelmingly favours HAL. Industry sources say that although the process is designed to encourage indigenous participation, it limits the scope for meaningful private involvement.
One of the main points of contention is the clause mandating that any Indian bidding entity—whether standalone or in a joint venture—must be owned and controlled entirely by resident Indian citizens. This effectively rules out partnerships with foreign Original Equipment Manufacturers (OEMs), which several private Indian aerospace firms depend on for critical expertise in advanced fighter production.
Additionally, the EOI requires all key managerial positions, including CEO, CFO, and the full board of directors, to be held by Indian citizens residing in India. This restriction prevents private firms from hiring foreign specialists in leadership roles, a common practice in the aerospace sector to leverage global know-how.
The financial eligibility requirements have also raised eyebrows. To qualify, a lead firm must have had an annual turnover of at least ₹2,000 crore over the past three financial years, while secondary partners in any JV must show at least ₹200 crore annually. HAL is currently the only aerospace firm in India meeting all these financial criteria.
In the case of joint ventures or consortia, the EOI limits the lead partner’s ownership to a maximum of 50 percent and caps the total number of participants at three, further narrowing the private sector’s ability to form viable partnerships.
Industry insiders argue that the detailed scoring system for bid evaluation appears to favour HAL—either as a sole bidder or in partnership with smaller private entities—thus reinforcing HAL’s position as the de facto lead integrator.
According to one private sector executive, the process appears to be reverting to the original internal plan: HAL would lead AMCA production, subcontracting specific components such as wings and fuselage to private firms. “Despite the EOI promising equal opportunity, HAL remains the only practical contender under these terms,” the executive said.
The AMCA is India’s most ambitious indigenous fighter jet programme, aimed at bridging critical technological gaps in air power and reducing reliance on foreign platforms. However, the current EOI structure has prompted renewed debate about the future role of private enterprise in India’s defence ecosystem, especially in high-value, strategic projects.
