In a landmark decision that underscores India’s push for self-reliance in defense, the Cabinet Committee on Security (CCS) approved the procurement of 97 Tejas Mk 1A fighter aircraft for the Indian Air Force (IAF) on August 19, 2025. The order, valued at Rs 66,000 crore (approximately US$7.9 billion), is one of the largest single deals for indigenous fighter jets in India’s history.
This approval comes after the Defence Acquisition Council’s (DAC) Acceptance of Necessity (AoN) in November 2023. The Ministry of Defence had floated a tender worth Rs 65,000 crore in April 2024, and after final negotiations, the contract value was fixed at Rs 66,500 crore. The acquisition is expected to significantly strengthen the IAF’s combat capabilities while accelerating the phase-out of the aging MiG-21 fleet.
Background of Previous Orders
This latest order builds on the February 2021 contract worth Rs 48,000 crore for 83 Tejas aircraft, which included 73 Mk 1A fighter jets and 10 Mk 1 trainer variants. Deliveries were initially scheduled to begin by March 2024 but faced delays due to technical challenges, particularly engine supply shortages from General Electric (GE). The first aircraft from this batch is now expected by November 2024.
Earlier contracts signed in 2006 and 2010, worth Rs 8,802 crore, covered 40 Tejas Mark 1 aircraft. Of these, Hindustan Aeronautics Limited (HAL) has delivered 38, with the remaining two nearing completion. However, delays in production continue to be a matter of concern for the IAF, which anticipates only two to three Mk 1A deliveries in 2024-25 against the earlier promise of 16.
Key Features of Tejas Mk 1A
The Tejas is a 4.5-generation, single-engine, multirole, delta-wing fighter designed by the Aeronautical Development Agency (ADA) and manufactured by HAL. As the smallest and lightest supersonic fighter in its class, it offers agility and versatility for multiple roles, including interception, air-to-air combat, ground attack, and air defense.
The Mk 1A variant incorporates advanced features such as active electronically scanned array (AESA) radar, beyond-visual-range (BVR) missile capability, an advanced electronic warfare suite, and air-to-air refueling. The indigenous content in the aircraft currently exceeds 65 percent by value, with plans to increase it to 75.5 percent for line-replaceable units.
The Tejas has built a reputation for reliability, with an impeccable safety record since its maiden flight in 2001. It officially entered IAF service in 2015 and has since participated in major events, including the Republic Day fly-past in 2024 and Exercise Tarang Shakti.
Recent Milestones
The Tejas program has seen notable achievements in recent years. On August 23, 2023, a Tejas successfully test-fired the Astra Mk-1 beyond-visual-range missile at 20,000 feet off Goa, marking a significant leap in indigenous weapons integration. In March 2024, high-altitude testing of the On-Board Oxygen Generating System (OBOGS-ILSS) was completed, enabling sustained operations at altitudes of up to 50,000 feet. These advancements highlight the steady progress of India’s indigenous defense ecosystem.
Government Statements and Strategic Vision
Speaking at the World Leaders Forum on August 22, 2025, Defence Minister Rajnath Singh hailed the Tejas as a symbol of India’s indigenous defense capabilities. He emphasized that India’s defense policy goes beyond reducing imports, focusing instead on creating a robust ecosystem that meets both domestic and global demands. Singh highlighted the establishment of defense industrial corridors in Uttar Pradesh and Tamil Nadu as key growth drivers and invited global defense companies to co-produce in India, citing the Airbus-Tata partnership for C295 aircraft as a successful example.
Expanding Production Capacity
HAL has been expanding its production facilities to meet the growing demand for Tejas aircraft. Bengaluru Plant I, established at a cost of Rs 1,556 crore, has a production capacity of eight aircraft per year. Bengaluru Plant II, sanctioned in 2017 with an investment of Rs 1,381.04 crore, doubled the annual capacity to 16. To further boost output, a new plant was opened in Nashik in April 2023 with an investment of Rs 150 crore, raising the total annual capacity to 24 aircraft. The first aircraft from this facility is expected by the end of FY 2024-25, with a rollout scheduled for July 2025.
The private sector is also playing an increasingly important role in the program. Companies like Larsen & Toubro, Alpha Tocol, Tata Advanced Systems, VEM Technologies, and Lakshmi Mission Works are manufacturing sub-components such as fuselages and wings. The delivery of the first rear fuselage for Tejas Mk 1A by the private sector in March 2025 was hailed as a major milestone by the defence establishment.
Engine Challenges
Despite these advancements, challenges remain, particularly in engine supply. The Tejas Mk 1A relies on GE F404 engines, and delays in their delivery have disrupted production schedules. GE has committed to supplying additional engines by March 2025 after facing penalties for missing earlier deadlines. At the same time, India is exploring collaboration with France’s Safran to develop indigenous engines for future Tejas variants and the upcoming Advanced Medium Combat Aircraft (AMCA).
Strategic and Economic Implications
The IAF has plans to induct 324 Tejas aircraft across all variants, including the Tejas Mk 2, to replace its MiG-21, MiG-23, and MiG-27 fleets. This will eventually form 18 squadrons, with the first Mk 1A squadron expected to be operational at Nal airbase in Rajasthan by June 2024.
The economic impact of the Tejas program is equally significant. The large orders are expected to generate substantial business for small and medium enterprises while strengthening India’s defense manufacturing base. Defense exports have grown dramatically from Rs 686 crore in 2013-14 to Rs 23,622 crore in 2024-25, while domestic production has tripled to Rs 1.5 lakh crore.
The stock market has also responded positively to the new order. HAL’s shares surged by 7.6 percent following the announcement, with analysts like UBS projecting a 32 percent upside based on the company’s strong order pipeline.
Challenges and Criticism
While the Tejas program has achieved important milestones, concerns remain about delivery delays and India’s reliance on imported engines. Air Chief Marshal AP Singh has called for increased private sector involvement and higher R&D spending, suggesting that allocations should rise from the current 5 percent of the defense budget to at least 15 percent.
Critics have also raised questions about prioritizing indigenous engines over imported ones, arguing that reliance on foreign suppliers undermines the vision of true self-reliance. Others stress that alongside quantity, the focus must remain on quality and reliability to ensure operational effectiveness.
Future Prospects
Looking ahead, HAL is developing the Tejas Mk 2, a more advanced 4.5+ generation aircraft, and the AMCA, India’s first fifth-generation stealth fighter. The AMCA is expected to have its maiden flight in 2025, marking another milestone in India’s aerospace ambitions. Export opportunities for Tejas are also expanding, with countries such as Egypt, Argentina, the US, Australia, Indonesia, Malaysia, and the Philippines expressing interest. India has set an ambitious target of achieving Rs 50,000 crore in defense exports by 2029, with Tejas playing a pivotal role.
The recent order for 97 Tejas Mk 1A aircraft not only boosts the IAF’s operational readiness but also reaffirms India’s commitment to building a self-reliant, world-class defense ecosystem. With ongoing challenges around engines and delivery timelines, the success of this program will depend on how effectively India balances indigenous innovation with global partnerships.
