India’s Ministry of Defence signed a contract with Hindustan Aeronautics Limited on Thursday, September 25, 2025, in New Delhi for 97 Tejas Mk1A India Tejas fighter aircraft, valued at over INR 62,370 crore ($7.03 billion), to bolster the Indian Air Force’s capabilities through indigenous production under the ‘Buy (India-IDDM)’ category.
Why It Matters in South Asia
This procurement underscores India’s strategic pivot towards homegrown defence manufacturing, countering China’s expanding military footprint along shared borders and deepening defence ties with Pakistan. By prioritising the India Tejas fighter aircraft, New Delhi aims to reduce import dependencies, foster technological sovereignty, and enhance deterrence in a volatile region where aerial superiority remains pivotal to national security. The deal not only revitalises the Indian Air Force’s squadron strength but also sets a precedent for collaborative South Asian defence ecosystems, potentially influencing export opportunities and regional alliances.
Homegrown Tejas Deal 7 Billion Boosts Indigenous Aerospace
The homegrown Tejas deal 7 billion represents a significant escalation in India’s commitment to self-reliance in defence production. The contract covers 68 single-seat fighters and 29 twin-seaters, equipped with cutting-edge indigenous systems that elevate the India Tejas fighter aircraft to a formidable multi-role platform. According to official details, these jets incorporate over 64 per cent indigenous content, surpassing the previous LCA Mk1A agreement signed in January 2021 by integrating 67 additional locally developed components.
Key enhancements include the UTTAM Active Electronically Scanned Array (AESA) radar, which provides superior detection and targeting precision, and the Swayam Raksha Kavach electronic warfare suite for enhanced survivability in contested airspace. Control surface actuators, also indigenously sourced, ensure agile manoeuvrability during high-threat missions. These features position the India Tejas fighter aircraft as a versatile asset for air superiority, ground strikes, and reconnaissance operations.
The agreement builds on earlier milestones, including the 2021 order for 83 Tejas Mk1A jets valued at approximately INR 48,000 crore. According to the Ministry of Defence, the initial greenlight for this expanded procurement came in August 2025, with the formal signing marking the culmination of rigorous evaluations under the Defence Acquisition Procedure 2020. Deliveries are slated to commence in the financial year 2027-28 and conclude over a six-year period, allowing Hindustan Aeronautics Limited to scale up production lines in Bengaluru and Nashik.
Strategic Edge for Indian Air Force
For the Indian Air Force, the infusion of 97 additional India Tejas fighter aircraft is critical amid ongoing fleet modernisation efforts. Currently operating at 29 squadrons against an authorised strength of 42, the IAF faces depletion from the retirement of ageing MiG-21s and delays in foreign acquisitions. This homegrown Tejas deal 7 billion will expand the total Tejas fleet to 220 aircraft, providing a potent indigenous backbone to replace legacy Soviet-era platforms.
Defence Minister Rajnath Singh highlighted the transformative impact, stating that the supply of these aircraft by HAL would enhance operational capability of the Indian Air Force to continue their unhindered operations and strengthen defence preparedness. The jets, powered by General Electric F404 engines with a separate follow-on agreement anticipated for additional units address previous supply chain hurdles exacerbated by post-pandemic disruptions.
The procurement’s economic ripple effects are equally noteworthy. It is projected to sustain nearly 11,750 direct and indirect jobs annually for six years, engaging a robust ecosystem of 105 Indian vendors for component manufacturing. This infusion of capital into the domestic aerospace sector aligns with the Aatmanirbhar Bharat initiative, promoting innovation and reducing reliance on foreign suppliers. HAL, as the lead integrator, will leverage its state-of-the-art facilities to meet the timeline, further cementing its role in India’s defence industrial base.
Background
The Tejas programme, initiated in the 1980s under the Aeronautical Development Agency, has evolved from a technology demonstrator to a battle-proven light combat aircraft. Initial operational clearance was granted in 2013, followed by full operational clearance in 2019. The Mk1A variant addresses early limitations with upgraded avionics and weapons integration, enabling compatibility with precision-guided munitions and beyond-visual-range missiles. This homegrown Tejas deal 7 billion follows a series of indigenous successes, including the induction of the first Tejas squadron in 2016 and export overtures to nations like the Philippines and Argentina.
Challenges such as engine delays from General Electric have been mitigated through diplomatic engagements, ensuring steady supply for the India Tejas fighter aircraft. The deal also coincides with broader reforms, including increased foreign direct investment caps in defence to 74 per cent, attracting global partners while prioritising local content.
What’s Next
As production ramps up, attention will turn to the Tejas Mk2 variant and the Advanced Medium Combat Aircraft project, both eyeing induction by the early 2030s. This homegrown Tejas deal 7 billion not only fortifies India’s aerial defences but also paves the way for the India Tejas fighter aircraft to emerge as a viable export contender, potentially reshaping South Asian security dynamics through technology transfers and joint ventures.
In the long term, the success of this procurement could inspire neighbouring countries to invest in collaborative defence manufacturing, fostering stability while underscoring India’s leadership in regional innovation.
Published in SouthAsianDesk, September 26th, 2025
Follow SouthAsianDesk on X, Instagram, and Facebook for insights on business and current affairs from across South Asia.
