HAL Eyes 2035 AMCA Production: The Long Game for India’s Stealth Fighter

The race for India’s first indigenous fifth-generation fighter, the Advanced Medium Combat Aircraft (AMCA), has taken a strategic turn. While recent reports suggest the state-owned Hindustan Aeronautics Limited (HAL) has been sidelined from the initial prototype development phase, HAL Chairman DK Sunil has clarified that the PSU is far from out of the program. Speaking on February 5, 2026, Sunil emphasized that HAL is preparing for a “Stage 2” entry when series production begins around 2035.

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AMCA Phase 1: Why HAL Might Miss the Prototype Stage

The Aeronautical Development Agency (ADA) is currently shortlisting consortia to build five AMCA prototypes and a structural test specimen. Sources indicate that HAL’s massive order book—currently estimated at over ₹2.5 lakh crore—may have triggered a “capacity constraint” clause in the selection criteria.

• Shortlisted Frontrunners: Tata Advanced Systems, L&T (with BEL), and Bharat Forge (Kalyani Group).

• The “3X” Rule: Selection criteria reportedly penalize firms whose order books exceed three times their annual turnover. HAL’s current book is roughly eight times its FY25 revenue, leading the government to favor private players to establish a parallel production line.

Stage 2 Ambitions: The 2035 Licence Manufacturing Bid

Despite the potential Phase 1 exclusion, HAL remains the only Indian entity with extensive experience in the full-scale assembly of supersonic fighters.

“Not participating in stage 1 does not mean we can’t participate in stage 2,” Sunil told The Indian Express.

When the IAF moves toward the induction of approximately 120 AMCA jets (six squadrons) in the mid-2030s, fresh tenders will be floated for licence manufacturing. HAL intends to bid aggressively for this phase, leveraging its Nashik and Bengaluru facilities.

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LCA Mk1A Status: 5 Jets Ready, 9 Awaiting Engines

Addressing concerns over the Tejas Mk1A program, HAL confirmed that five aircraft are “fully ready” for delivery to the IAF within this financial year. However, a significant bottleneck remains with powerplants:

• Ready for Delivery: 5 aircraft (fully integrated with AESA radar and EW suites).

• Built & Flown: 9 additional airframes are complete but awaiting GE F404 engines from the US.

• In Pipeline: 10 more aircraft are currently in various stages of final assembly.

The delay is primarily attributed to global supply chain disruptions at GE Aerospace, though HAL maintains that the supply outlook for the remaining engines is now “positive.”

Post-2032 Roadmap: IMRH, LCA Mk2, and CATS

HAL has signaled that its long-term growth is not dependent solely on the AMCA. The company has a production pipeline secured until 2032, after which several “mega-projects” will transition from development to the assembly line:

1. LCA Mk2: The medium-weight fighter expected to replace the Mirage 2000 and MiG-29 fleets.

2. IMRH (Indian Multi-Role Helicopter): A 13-tonne class helicopter designed to replace the ageing Mi-17 fleet.

3. CATS (Combat Air Teaming System): India’s ambitious “loyal wingman” drone program, which will see manned fighters controlling autonomous strike drones.

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Financial Health: Revenue Visibility Beyond the AMCA Snub

HAL’s stock saw a minor correction following news of the AMCA prototype snub, but the company’s fundamentals remain robust. By diversifying into the civil aviation segment—with the Hindustan 228 and the SJ 100 regional jet—HAL is hedging against the cyclical nature of defense contracts. The PSU has not yet factored AMCA revenues into its 10-year projections, suggesting any future contract would be a “pure upside” to its current valuation.

Next Steps

Keep an eye on the commercial bid opening for the AMCA prototype contract, expected in April 2026. This will reveal which private player will lead the stealth program. You should also watch for the delivery of the first five Tejas Mk1A jets to the IAF’s 45 Squadron, which will signal the end of the current production deadlock.

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