The procurement of 97 upgraded Tejas Mk-1A fighter jets, under a Rs 67,000-crore procurement plan from Hindustan Aeronautics Ltd (HAL), is likely to begin only in financial year 2026–27 (FY27), a senior government official said.
The per-unit cost – estimated around Rs 600 crore – has risen, partly due to foreign exchange volatility linked to the aircraft’s US-imported engine.
The large-scale order, expected to be cleared by the Cabinet shortly, marks the next phase in India’s indigenous fighter jet programme, after the previous order for 83 Tejas Mk-1A aircraft that was placed in 2021 and valued around Rs 48,000 crore.
“The procurement will be spread over 4-5 years, starting FY27, and will cost around Rs 600 crore per unit as this is an advanced version,” the official told Moneycontrol.
The aircraft is powered by the General Electric F404 engine, and the fluctuation in the rupee-dollar exchange rate has contributed to the cost escalation, the official explained.
Despite the forex-related impact, HAL has made significant progress on indigenisation. The indigenous content in the upgraded Tejas has now reached 60 percent, up from around 50 percent in earlier versions.
“HAL has worked to enhance the domestic share of components, with key systems like radar and high-frequency radios now being produced by Bharat Electronics Ltd (BEL),” the official added.
Engine supply now stable
In its latest earnings call held in May 2025, HAL Chairman and Managing Director D K Sunil confirmed that supply-chain issues relating to General Electric’s F404 engines – which power the Tejas Mk-1A – have now been resolved. The first engine was delivered in April, and tested and integrated into an aircraft. GE has committed to supplying 12 engines by December 2025, HAL stated.
“So, the visibility is that 12 aircraft will be ready this year with these engines,” Sunil said. “We expect that since GE has overcome the supply-chain issue, deliveries will continue in the succeeding years and should be smooth,” he said.
The upcoming order will help HAL stabilise production lines at its Bengaluru and Nashik facilities. Officials said the output will eventually be scaled up to 24 aircraft annually. The new order is expected to provide the necessary demand visibility for HAL to plan further investments and resource mobilisation, including through its Tier 1 and Tier 2 suppliers.
The previous order for 83 Tejas Mk-1A jets is now in an advanced stage of execution. Following delays caused by a hold-up in engine supplies from General Electric, HAL has assured the Ministry of Defence that it is on track to begin deliveries by mid-2025. The entire batch is expected to be completed by 2028, according to HAL.
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