More than a stealth fighter

The Amca programme could deliver the defence sector's own Maruti moment

19 min read

Updated On: Jul 10 2026 | 9:10 PM IST

A prototype of the advanced medium combat aircraft at the Aero India air show at Yelahanka air base, Bengaluru, in 2025. Photo: Reuters

India’s private-sector makers of military materiel may be approaching their own “Maruti moment”. For the first time, one of them is set to take charge of a defence development programme of a kind that has until now been the exclusive domain of state-owned firms.

The fate of the advanced medium combat aircraft (Amca), the country’s first homegrown radar-evading fighter jet, now rests with them, although public-sector firms have partnered with two of the three contenders as junior partners.

In the coming months, a decision is expected on whether the Tata Group or one of the two consortiums led by Larsen & Toubro (L&T) and the Kalyani Group will be selected to develop and build the aircraft’s prototypes, under a programme that has a total outlay of ₹15,000 crore. State-owned Hindustan Aeronautics Limited (HAL), long the country’s sole combat-aircraft manufacturer, could not qualify at the expression of interest stage.

Former chairman of the Defence Research and Development Organisation (DRDO), G. Satheesh Reddy, described the Amca execution model, approved by the Ministry of Defence (MoD) in May 2025, as a very positive step for the Indian private industry.

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The model placed private and public-sector Indian defence firms on an equal footing, allowing them to compete for the programme either independently, through joint ventures, or as part of consortia, and qualify as the development-cum-production partner for the stealth jet’s prototypes. Crucially, the winner would also be the natural contender for the aircraft’s eventual serial production.

“It gives top private players their first real shot at becoming lead system integrators for a fifth-generation stealth combat aircraft, which represents high-value work involving stealth manufacturing, composites, systems integration, and certification,” said Reddy, who currently serves as a member of the National Security Advisory Board, along with being the adviser (aerospace and defence sector) to the Andhra Pradesh government.

The Amca programme’s leap in technological complexity marks the first of several parallels with the Maruti 800, a small passenger car launched in 1983.

A 2020 paper published by the Institute for Studies in Industrial Development (ISID), New Delhi, noted that passenger vehicles sold in India until the 1980s relied on vintage 1950s technology, with minor modifications at best.

Aerospace presents a similar picture, with India’s most advanced military aircraft programme to date, the Tejas light combat aircraft (LCA), serving as the prime example. Designed by the DRDO’s Aeronautical Development Agency (ADA) — the same agency behind the Amca — and manufactured by HAL, the jet is built around technologies that matured globally in the 1970s and 1980s, although later variants have incorporated more recent advances in military sensors, avionics and electronics.

“In terms of technology and capability, the Amca will be a generation ahead of most aircraft currently in service with the IAF. While those aircraft will continue to form the backbone of the force, the Amca will be better suited for operations in areas where enemy air defences pose a significant threat,” a defence services source told Blueprint. “The jet has been designed from the ground up to be difficult for enemy radars to detect. This is achieved through its shape and the materials used in its construction,” the source added.

The parallel, however, also lies in the fact that both the Maruti 800 and the Amca represent more than the machines themselves.

The private sector’s successes in defence manufacturing have so far come largely in segments such as armoured vehicles, small arms and artillery. Many have involved licensed production of foreign designs, though some indigenous programmes, several developed with the DRDO, have also gained traction. In aerospace, the final assembly of a foreign-origin military transport aircraft remains the most complex programme executed by private industry.

The Amca would therefore be the most demanding defence development programme ever entrusted to private players. If successful, it would mark a step change not just for the companies involved but for the industry as a whole. Like the Maruti 800 before it, the programme could become a symbol of what can be achieved in the country. It could also help redefine the limits of what private industry is perceived to be capable of undertaking, opening the door to a larger role in the ambitious programmes India is likely to pursue as it seeks to build a “modern, integrated and technologically advanced military” capable of supporting the 2047 Viksit Bharat vision.

“The benefits of reforms over the past decade — especially successive iterations of defence acquisition procedures that have progressively sought to create a more level playing field between public- and private-sector participants — are likely to become increasingly visible over the next five to 10 years. This is likely to become even more evident as programmes such as the Amca begin delivering tangible outcomes,” a senior industry leader and member of the Society of Indian Defence Manufacturers (SIDM), who is familiar with the Amca project, told Blueprint on condition of anonymity.

Encouraging outcomes

The most important parallel, however, may lie in the precedent the Maruti 800 set for the evolution of industrial participation in the automotive sector.

Maruti Suzuki, formerly Maruti Udyog Ltd, was established in 1981 as a joint venture between the Government of India and Suzuki Motors Ltd of Japan. Within a decade of the launch of the Maruti 800, the ISID paper noted, the company had captured more than 60 per cent of India’s passenger vehicle market.

This development, together with the reforms that followed — including the Statement on Industrial Policy of 1991, the Automobile Policy of 1993, and the National Auto Policy of 2002 — led, perhaps unsurprisingly, to a broadening of industrial participation in the sector. The ISID paper notes at least 12 foreign automotive companies established themselves in India from the mid-1990s onwards, either independently or in collaboration with Indian firms. The logic was straightforward: what had worked once could work again. The Amca — and, more specifically, the execution model devised for it — could play a similar role in shaping the

future of India’s aerospace and defence industry.

“A similar (Amca) model has already been employed for the Pinaka (multi-barrel rocket launcher), ATAGS (Advanced Towed Artillery Gun System), and close-quarter carbine (guns), with contracts already signed,” Defence Secretary Rajesh Kumar Singh told Blueprint.

The approach is in line with the Ministry of Defence’s (MoD) stated objective of doing away with the decades-long practice of nomination — the direct award of contracts to public-sector firms without competitive bidding. Singh added: “Going forward, contracts for defence equipment and systems will be concluded through competitive bidding involving both private and public players, with aircraft carriers and submarines and missiles that come under the strategic category being perhaps the limited exceptions.”

Private players have long argued that ending nominations is essential to creating a level playing field. As the policy begins to move in that direction, the MoD has also unveiled the draft Defence Acquisition Procedure (DAP) 2026. Intended to replace the 2020 framework that currently governs acquisitions ranging from tanks and warships to fighter jets and drones, the proposed policy seeks to institutionalise “civil-military fusion” — an integrated ecosystem in which civilian and military sectors share capabilities and innovation. If implemented, it could create still more opportunities for private industry in defence.

Taken together, these developments and the Amca programme arrive at a pivotal moment for India’s private defence sector. Twenty-five years after defence manufacturing was opened to it in May 2001, the financial year 2025-2026 (FY26) marks the first time its share of military production has approached a quarter of the national total.

Between FY17 and FY25, domestic defence production more than doubled, rising from ₹74,054 crore to ₹1.54 trillion. Over the same period, output from private firms grew even faster, from ₹14,104 crore to ₹33,978 crore. Yet their share remained broadly unchanged at around 19-21 per cent between FY17 and FY24, before rising to 22 per cent in FY25. The FY26 figures suggest that equilibrium has finally been broken. Since FY17, overall output has risen by about 140 per cent to roughly ₹1.78 trillion, while production by private firms has nearly trebled, growing by about 198 per cent to around ₹42,000 crore, or nearly a quarter of the national total.

Referencing this trajectory, another senior industry leader, again speaking on condition of anonymity, argued that meaningful private-sector involvement in production only began to gather momentum after 2015, more than a decade after the formal opening up of the sector. “By and large, it has only been about two-and-a-half decades since most private-sector players entered the defence space and began looking at it seriously, and barely a decade since substantial production activity actually commenced,” he said, adding, “This means the full impact of these developments has yet to become visible. Given the long gestation periods associated with defence acquisition and development programmes, the effects are likely to emerge with a time lag.”

All about Amca

Against this backdrop, both industry insiders who spoke to Blueprint argued that the Amca execution model could serve as a template for future programmes, particularly those aimed at expanding the role of private industry.

Touching on the reasons, Reddy explained that the model explicitly recognises qualified private players as credible candidates not only to integrate hundreds of complex subsystems into a single aircraft, but also to assist in the testing and certification of the finished platform. Crucially, they are entrusted with these responsibilities from the prototype stage itself, rather than being relegated to the role of peripheral vendors.

“This goes well beyond incremental policies that encouraged private participation in subsystems or smaller platforms. Instead, it represents a deliberate structural reset — moving from public-sector primacy to a more evolved competition-driven capability building in the most complex segment of the defence aerospace ecosystem,” he added.

Buttressing his argument, Reddy noted that for decades, India’s model for major combat-aircraft programmes, including the LCA and even the earlier phases of the Amca, followed a predictable pattern. The DRDO and ADA would provide the design and technical leadership, HAL would serve as the default lead integrator and production agency, often through nomination, while private industry was largely confined to the role of tier-two and tier-three suppliers, component manufacturers, or participants in offset obligations arising from foreign contracts.

Moreover, even under the Defence Acquisition Procedure’s indigenous procurement categories, the MoD’s Inn ovations for Defence Excellence (iDEX) scheme, and the Centre’s flagship Production Linked Incentive programmes, private players rarely had the opportunity to lead the full integration of high-end manned combat aircraft.

One of the industry insiders highlighted another structural feature of the model: its role in further levelling the playing field between private and public-sector participants.

“DPSUs (defence public sector undertakings) have had decades to set up infrastructure for complex projects, aided by cost-plus contracting and nominations. But, the government making available the basic infrastructure for the Amca programme has proved to be a game changer, ensuring that private players won’t have to load the cost of developing the same onto their bids,” he explained.

To illustrate the point, he cited the foundation stone laid in May for an ADA core integration and flight testing centre for the Amca and other future indigenous platforms in Andhra Pradesh. The facility is expected to be built at a cost of about ₹2,000 crore.

Another structural roadblock private players have faced is that their public-sector counterparts, having long benefited from nominations, can leverage much larger order books to underbid them. That advantage is reinforced by the fact that even many recent large-ticket acquisitions stem from programmes initiated decades earlier under the same framework.

“Already having more infrastructure on hand, and possessing much larger order books than us, DPSUs often resorted to aggressive bidding. It was hard to compete with them for large contracts. But, the Amca model neutralised this too,” said the

industry insider.

One of the evaluation criteria under the expression of interest issued by ADA last year awarded zero marks to companies whose order books were three times their turnover. Industry sources regard this as one of the principal reasons HAL did not qualify.

Equally encouraging, according to a senior MoD source, is the fact that even after HAL’s exit from the race, the model has fostered collaboration between the private-sector contenders and other DPSUs. The source said this was in keeping with the ministry’s stated objective of creating a “dual production” pipeline for defence capabilities, bringing together credible private companies and state-owned defence firms.

Tata Advanced Systems Ltd (TASL), the Tata Group’s aerospace and defence arm, is competing independently. Bharat Forge Ltd, part of the Kalyani Group, is leading a consortium with DPSU BEML Ltd and private-sector defence electronics firm Data Patterns (India) Ltd. L&T is heading another consortium with DPSU Bharat Electronics Ltd (BEL). The L&T-BEL consortium has also brought in aerospace parts supplier Dynamatic Technologies Ltd as a partner.

One of the industry insiders said the DPSUs involved would bring decades of accumulated expertise to the table, adding that similar partnerships could emerge in future defence development programmes. BEL, for example, could be a natural partner in projects where sensors and their integration are central to the capability being developed.

Surmountable challenges

The Amca programme has gathered pace, with ADA issuing a request for proposal (RFP) in late May to the three shortlisted entities for the development and manufacture of the aircraft’s prototypes.

Under the programme, five flying prototypes and one structural test specimen are to be developed, along with the associated tooling, jigs, fixtures and testing infrastructure.

The RFP stipulates that the first prototype must take to the air within 30 months of the contract being signed. The aircraft is expected to make its debut using the F414 engine supplied by American manufacturer General Electric. If all goes according to plan, the first prototype will be rolled out by 2029, with the remaining four following by 2031.

In all, 1,800 sorties are planned and must be completed within 84 months, or seven years, of the contract being signed. This timeline is mandatory. Only after the flight-test campaign is completed will series production of the Amca begin.

The RFP also lays out a new industrial structure for the programme, requiring the selected bidder to incorporate a new company within three months of being chosen. It is through this dedicated entity, or special purpose vehicle, that the contract will be executed.

While the programme will remain under the design control of ADA, which retains ownership of the aircraft’s configuration and architecture, the selected bidder will be responsible for the end-to-end realisation of the prototypes, including manufacturing, assembly and systems integration. It will also support ground testing, structural testing, flight testing and certification activities, as well as troubleshooting during the developmental phase.

In addition, it will be required to establish the manufacturing infrastructure, tooling and associated test facilities needed for the programme.

“Risks exist. Private players have less experience in full fighter integration compared to HAL, and coordination headwinds will need to be addressed,” said Reddy.

The more advanced variant of the Tejas, the delayed Mark-1A, has already demonstrated the difference between getting an aircraft into the air and turning it into a combat-capable platform with fully tested and operational sensors and weapons. The Amca will be even more demanding. In addition to achieving stealth, it must carry and deploy its weapons from an internal weapons bay — a compartment built into the underside of the aircraft that houses the weapons while shielding them from enemy radar.

The hurdles are not insurmountable, however. Reddy underscored that ADA retains design authority and assumes the technical risk, while private industry is responsible for industrial execution. “If executed well, the Amca programme will strengthen India’s long-term aerospace industrial muscle.”

Selection of the winning bid will be based on technical evaluation and the lowest-bidder (L1) criterion. That last part could pose a challenge of its own.

Sayantan Haldar, an associate fellow with the Strategic Studies Programme at the New Delhi-based Observer Research Foundation (ORF), explained that the L1 framework in defence procurement awards contracts to the lowest technically compliant bidder, a mechanism intended to minimise discretion and ensure prudent use of public funds. “This framework can create challenges for private-sector participants, particularly in programmes that require innovation, quality service delivery, and long-term investment,” he added.

One of the industry insiders argued that the continued reliance on this framework to determine the winner could prove problematic not only for the Amca programme, but also for future efforts to replicate the execution model, particularly given that DPSUs themselves have struggled under it. “It may work for routine procurement, involving a mature product and where the requirement is reasonably well-defined. Its application becomes a challenge when the programme involves development and integration risks and technology creation. These can require enhancing industrial capability and execution capacity through long-term investment,” he said, adding, “How can a successful bid under a lowest-price framework account for all of this?”

He further argued that the framework can place greater emphasis on price discovery and disputes over technical compliance than on capability induction, which, in his view, ought to be the central consideration in high-technology development programmes.

Pvt sector share nears a quarter of total defence output

“L1 could dilute some of the advantages that private-sector participation is meant to bring to programmes such as the Amca, including greater agility than DPSUs,” said the other industry insider. “It can delay a programme or produce suboptimal outcomes, all over negotiations involving what is effectively 10–15 per cent of the projected development budget, without accounting for the opportunity cost of those delays.”

There is no indication at present that the L1 criterion will be abandoned in defence procurement, although the draft DAP 2026 proposes granting a 15 per cent credit for meeting indigenous design requirements when determining the lowest bidder in certain procurement categories. The draft also provides credits for ownership of critical technology elements underpinning platforms and systems.

Haldar, however, argued that moving away from the L1 system is not the only answer, noting that several procurement approaches can be used alongside it to strike a better balance between cost, quality and long-term value. “One commonly adopted approach is quality-and-cost-based selection, or QCBS, which evaluates bids based on both technical capability and financial competitiveness,” he said.

Haldar also pointed to two other mechanisms that could improve procurement outcomes and transparency. One is a two-stage bidding process, under which vendors first submit technical proposals without pricing, with commercial bids sought only from those that meet the required standards.

The other is the use of minimum technical qualification thresholds, where bidders must clear a mandatory baseline before progressing to the financial stage, at which point the contract is awarded to the lowest qualified bidder.

Model template

Rather than a one-off experiment for the Amca, Reddy argued that the programme’s competitive selection model could become the default template for future major development efforts, including advanced land and aerospace systems, large unmanned aerial vehicles, naval combatants and missile programmes. “This single change has the potential to do much more in order to enhance serious private-sector participation than any previous policy,” he said, adding, “It introduces accountability through competition rather than structural preference.”

Arguing that such an approach encourages genuine capability development — from technology absorption and project management to manufacturing readiness — Reddy pointed to the rapid consortium-building that the Amca programme has already triggered among India’s leading private defence firms.

Against this backdrop, he identified two complementary measures that should be retained and strengthened. The first is a clear division of responsibilities, with organisations such as the DRDO and ADA retaining design authority and technical oversight, while the competitively selected industry partner — whether a private company or consortium — takes responsibility for detailed engineering, prototyping, integration and production execution. The second is preserving flexibility by continuing to permit participation through independent bids, joint ventures and newly created special-purpose entities, thereby lowering barriers to entry.

There can be many a slip between the cup and the lip. The Amca is a project perhaps rivalled in complexity only by India’s successful nuclear submarine programme, which, incidentally, has also seen significant participation from one of the private contenders in the race. Even after the challenge of getting a functional prototype into the air has been overcome, more formidable tests will await. Chief among them could be the transition to series production, not least because the aircraft will eventually depend on a higher-thrust engine to be co-developed with a foreign partner.

But for now, one thing is certain. India is another step closer to getting a second combat aircraft manufacturer, this time with the private sector in the proverbial cockpit. All three contenders already possess experience in aerospace manufacturing, while TASL has broken HAL’s monopoly in military transport aircraft manufacturing through its final assembly line for the Airbus C295 in Gujarat.

How far the model ultimately reshapes India’s aerospace and defence industry, however, will depend on more than the success of the Amca alone. It will also hinge on the extent to which the country’s defence manufacturers identify further opportunities for collaboration, rather than defaulting to the cut-throat competition that so often characterises the industry. That challenge exists not only between the public and private sectors, but within the latter as well, as demonstrated by TASL’s decision to bid independently for the Amca despite efforts by the leading players to come together.

Which brings us back to the “Maruti moment”. The Amca programme has the potential to catalyse for India’s aerospace and defence industry the kind of transformation the Maruti 800 helped set in motion in the country’s automobile sector, one that eventually saw companies such as the Tata Group and Mahindra & Mahindra — major defence players themselves — emerge as manufacturing giants.

But that outcome is far from assured. For it to materialise, both the stealth fighter and the industrial model it has spawned must not only take off, but also make a successful landing.

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Written By :

Bhaswar Kumar

Bhaswar Kumar has over seven years of experience in journalism. He has written on India Inc, corporate governance, government policy, and economic data. Currently, he covers defence, security and geopolitics, focusing on defence procurement policies, defence and aerospace majors, and developments in India’s neighbourhood.