HAL's monopoly opposed

Defence Minister A K Antony on Tuesday called on the private sector to play a greater role in the Indian defence sector.

Commenting on a future project to replace some 56 Avro aircraft in the IAF, Antony said the government has tried to give more role to the private sector despite HAL being “little unhappy and little angry” over it.

“We are giving more space to the private industry. Even though HAL is a little unhappy and a little angry, it will give a chance to the Indian private sector for the Avro replacement programme,” he said, adding: “It is a beginning.” Antony said, if the programme succeeds, it will create rivals for the HAL. HAL so far does not have any competition locally, he added.
 

“They will also see competition. I want some rivals for HAL. That is how HAL would become a world-class company,” he said. Under the Avro replacement project, the IAF is planning to issue a global tender next month under which Indian private sector companies would be allowed to form joint ventures with foreign companies to produce transport aircraft. The IAF’s Rs 12,000 crore Avro replacement programme is being seen as a significant opportunity for Indian companies wanting to take up the project.

The programme includes 16 flyaway and 40 to be built by an Indian firm. However, according to sources, the poor response from the Indian private sector has proved to be embarrassing for the IAF. This made IAF state it would prefer the project to be handed over to the private sector than being handled by HAL.