Tejas Light Combat Aircraft – arguably the smallest and lightest aircraft in its class of 4th-generation supersonic combat aircraft – is one of the proud achievements of Hindustan Aeronautics Limited (HAL).

January 13, 2021. To boost the Indian Air Force’s combat prowess, the Cabinet Committee on Security (CCS) led by the Prime Minister Narendra Modi passed a Rs 4,80,000 million deal to procure 73 Tejas Mk-1A variants and 10 LCA Tejas Mk-1 trainer aircraft from the HAL.

According to some speculations, the Indian defense forces may spend nearly USD 130 billion in capital procurement till 2026.

The policy of the Indian government seems to make self-reliant in defence sector. In May 2020, the Finance Minister Nirmala Sitharaman introduced several reform measures for this sector like:

• making separate budgetary outlay to procure Indian-made military hardware,
• revising the FDI limit from 49 percent to 74 percent under the automatic route and
• generating a year-wise negative list of weapons which will not be imported.

Thus it is becoming increasingly clear that the government has been intent on boosting domestic defence production. A target of USD 25 billion spend here in the next five years appears indeed ambitious.

The Tejas programme presently involves 563 domestic enterprises. This will go up to 600 to 650 in near future. The program has boosted the overall aerospace sector in India. This plays a key role in maintaining the health of the ecosystem and stakeholders involved therein.

The result of such initiatives have been very encouraging. Small countries which can not afford buying from the US or EU, turn towards India to fulfil their defence requirements.

According to the Chairman and Managing Director of HAL, R Madhavan, a number of other countries have also started showing keen interest in the purchase of the Tejas aircraft from the HAL.

The HAL will first fulfil IAF domestic orders and is prepared to scale up its production whenever export orders come up without stressing the committed time lines.

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Apparently, the Tejas Mark 1A jet has superior performance levels compared to China’s JF-17 combat aircraft as shown in the table.

In a recent interview to the media, the HAL chairman Madhavan, has explained the cost components of Tejas which basically consist of:

• Basic price of the aircraft – Rs 2,50,000 million
• Ground support equipment and other required infrastructure at the bases – Rs 1,10,000 million
• Basic customs duty and output GST – Rs 70,000 million
• Rs 22,500 million reserved for variations in rupee-dollor rates
• The Aeronautical Development Agency (ADA) also gets a credit of Rs 25,000 million for the decades of R&D it has put in.

Thus the price can be found out as:

• For one fighter version of the aircraft: Rs 3,090 million
• For one trainer version: Rs 2,800 million.

For HAL, this cost of production not only meets the break even level, but it keeps the PSU comfortable, and its workforce happily involved for the next decade or so. Besides, the steady cash flow further increases when HAL starts exporting its products. And above all, the brand value of HAL, the respect for India among other countries including the US and the EU get a tremendous boost unless, of course, some other country comes up with a better aircraft at a more competitive price and terms. Even then, India shall remain the undisputed leader because by that time India would have progressed even further.

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Also Read: https://en.wikipedia.org/wiki/HAL_Tejas

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About Post Author

Naleen Chandra

Naleen Chandra, founder of NC Airways based at Patna in Bihar. The author and coauthor of several blog posts. He has worked for more than 20 years in Aviation as an Aircraft maintenance engineer at senior management. He is a keen observer of socio-economic conditions which affect every aspect of the common man’s life. He is a corporate director and investment banker-turned political commentator. Views expressed here are, of course, personal.

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