Defence Ministry Inks Major Contract with HAL to Bolster Indigenous Air Power and Atmanirbhar Bharat Initiative
Published on: September 26, 2025
By: BTNI
Location: New Delhi, India
Marking a pivotal step in India’s push for self-reliance in defence manufacturing, the government signed a Rs 66,500 crore contract on September 26, 2025, with Hindustan Aeronautics Limited (HAL) for the procurement of 97 Tejas Mark 1A lightweight multi-role fighter aircraft. The deal, cleared by the Cabinet Committee on Security earlier this year, aims to modernize the Indian Air Force (IAF) amid rising regional security challenges, including border tensions with China and Pakistan.
Prime Minister Narendra Modi hailed the agreement as a “milestone for Atmanirbharta,” emphasizing its role in positioning India as a top global defence exporter by 2047.The Tejas Mk1A, an advanced indigenous variant of the Light Combat Aircraft, features enhanced avionics, active electronically scanned array (AESA) radars, and electronic warfare suites, significantly improving upon the existing Mk1 fleet. Delivery of the first squadron is slated to begin within 36 months, with HAL ramping up production at its Nashik facility.
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This contract not only creates over 5,000 direct and indirect jobs but also involves private sector partnerships for key components, fostering a robust aerospace ecosystem. Defence Minister Rajnath Singh, who inaugurated a related production unit in Morocco earlier this week, noted that the deal will reduce import dependency by 70% for these jets. Coming amid the retirement of ageing MiG-21s—nicknamed the “flying coffin” after decades of service—the acquisition strengthens India’s aerial deterrence capabilities in a volatile Indo-Pacific landscape.
