Hindustan Aeronautics Limited (HAL) has revised its contract with the Indian Air Force (IAF) for the production of Light Combat Aircraft (LCA) TEJAS MK-1 Final Operational Clearance (FOC) fighter jets, increasing the deal’s value from ₹5,989.39 crore to ₹6,542.20 crore.

This adjustment, confirmed in a regulatory filing on Thursday, stems from revisions in the delivery schedule of the aircraft.

The original contract, signed on December 23, 2010, aimed to bolster India’s indigenous fighter jet program and establish the TEJAS as a key component of the IAF’s fleet.

The TEJAS MK-1A variant represents a significant technological leap forward, featuring advanced capabilities such as an Active Electronically Scanned Array (AESA) radar, Beyond Visual Range (BVR) missile capability, an Electronic Warfare (EW) suite, and Air-to-Air Refuelling (AAR).

As part of India’s first "Buy (Indian-Indigenously Designed, Developed, and Manufactured)" category procurement of combat aircraft, the program prioritises domestic manufacturing. Currently, 50% of the aircraft's components are sourced locally, with plans to increase this to 60% by completion. Out of the 344 systems integrated into TEJAS MK-1A jets, 250 are supplied by Indian manufacturers.

In a major milestone for the program, American defence giant GE Aerospace has delivered the first of 99 F404-IN20 engines to HAL. These engines are specifically tailored for India’s single-engine fighter program and feature high-thrust designs and advanced turbine blades to meet operational requirements.

GE Aerospace emphasised the challenges faced in restarting engine production after a five-year dormancy, compounded by disruptions caused by the COVID-19 pandemic. Despite these hurdles, GE and HAL engineers collaborated extensively to ensure compatibility with TEJAS’ unique specifications.

However, the TEJAS MK-1A program has encountered delays. The Indian Defence Ministry had signed a ₹48,000 crore deal in 2021 for 83 TEJAS MK-1A jets, with deliveries initially slated to begin in March 2024. As of now, HAL has yet to deliver any aircraft due to project-related issues. The supply of F404 engines is expected to accelerate production and help HAL meet revised timelines as part of IAF’s modernisation efforts.

Despite these challenges, HAL’s financial performance remains robust. On March 27, HAL shares closed at ₹4,170 per share on the National Stock Exchange (NSE), reflecting a market capitalisation of ₹2.78 lakh crore.

The company reported a net profit of ₹1,432.60 crore for the quarter ending December 2024—a 14.28% increase compared to ₹1,253.51 crore in the same period last year—alongside a 15% rise in revenue from operations to ₹6,956.93 crore.

As one of India’s premier defence public sector undertakings (PSUs), HAL plays a critical role in designing and manufacturing military aircraft and jet engines.

With contract amendments finalised and engine supplies secured, HAL is poised to ramp up production and address delivery hurdles. The coming months will be pivotal in determining whether HAL can meet its revised schedules and establish TEJAS as India’s primary indigenous combat aircraft while contributing significantly to the nation’s defence capabilities.

ET News