The Make in India (Atmanirbhar) initiative, launched by the Prime Minister of India, is aimed at transforming India into a global manufacturing hub. The defence sector, a key pillar of this initiative, has witnessed significant changes in the past decade and catalysed a shift in approach, particularly in the case of Hindustan Aeronautics Limited (HAL). Since its inception in the 1940s, HAL has played a pivotal role in enhancing India’s defence capabilities by manufacturing aircraft, helicopters and other aviation systems crucial to the Indian defence forces. Over the years, HAL has transformed itself from a producer of high–tech assets into a technology company credited with an array of indigenous products such as the ALH Dhruv, Rudra, and LCA Tejas.
Policy changes
The government has taken several policy initiatives in recent years and introduced reforms to encourage the indigenous design, development and manufacture of defence equipment, thereby promoting self–reliance in defence manufacturing and technology in the country. These initiatives, inter alia, include prioritising the procurement of capital items from domestic sources under the Defence Acquisition Procedure (DAP) 2020, which has led to a reversal of the 70:30 import–export ratio; the announcement of 18 major defence platforms for industry–led design and development in March 2022; and the notification of ‘Positive lndigenisation Lists’ for the Services and Defence Public Sector Undertakings (DPSUs), imposing an embargo on imports beyond specified timelines.
Strategic autonomy and security
When HAL started off in 1940 as an MRO for allied forces, very few would have predicted that it would produce the first indigenous supersonic fighter, the Hindustan Fighter–24 (Marut), in the early 1960s. However, in the 1970s and 1980s, the country’s focus shifted towards licensed manufacturing due to the geopolitical pressures of the time. The design of the LCA Tejas and ALH Dhruv in the 1990s further pushed the country towards indigenisation. The next significant boost for the development of indigenous capacity and capability came in 2014 through the Make in India initiative. The Make in India initiative has helped HAL transform itself from being a production agency for licensed/ToT manufacturing into an integrated provider of advanced technology solutions through indigenous design, development and production for both fixed and rotary wing platforms. The initiative mandates increasing domestic content in defence projects, and HAL has responded by developing new platforms with higher levels of indigenisation, including the Light Combat Aircraft Tejas, Hindustan Turbo Trainer–40, Light Combat Helicopter Prachand, Light Utility Helicopter and Advanced Light Helicopter Dhruv.
Self–reliance and indigenous capability building
The initiative has significantly boosted India’s defence production capabilities. In the fiscal year 2023–24, the defence production value reached approximately Rs. 1.27 lakh crore, marking a 16.7 per cent growth over the previous year. In the last five years, an increase of 60 per cent has been achieved. HAL has been a major player in this achievement by contributing 23.7 per cent of the share. The Value of Production of HAL has been steadily growing over the years from Rs. 20,590 crore in FY 2019–20 to Rs. 30,118 crore in FY 2023–24. Now there is a considerable decrease in dependency on foreign OEMs resulting in decreased Turn Around Time and increased serviceability of aircraft/ helicopters/systems. The Make in India initiative has led to a spurt in indigenisation efforts over the last ten years and has helped HAL in addressing supply chain challenges faced due to the current geopolitical situation. HAL’s indigenisation efforts have witnessed a fourfold increase in annual foreign exchange savings and a multi–fold increase in vendor base.
Increased foreign direct investment (FDI) and technology transfer
The initiative has opened up the sector to Foreign Direct Investment (FDI), with up to 74 per cent allowed through the automatic route and 100 per cent with government approval in specific cases. This has led to joint ventures, partnerships and technology transfers between Indian companies and global aerospace and defence giants, enabling Indian manufacturers to adopt advanced technologies. HAL signed an MoU with General Electric, USA, in June 2023 for ToT and Manufacturing of GE–414 aero–engine in India for LCA Mk.2 aircraft with 80 per cent technology transfer. A 50:50 Joint Venture “SAFHAL Helicopter Engines Pvt Ltd” was formed with Safran Helicopter Engines, France, in November 2023, for indigenous design and development of engines for Indian Multi Role Helicopter and Deck Based Multi Role Helicopter. This is the first instance where a high performance aero–engine will be jointly developed for an Indian platform with access to core engine technologies. Both the projects will result in acquiring core engine design and manufacturing technologies and transform the Indian aero engine manufacturing ecosystem.
Boost in defence exports
21 times, indicating India’s strengthening position in the global defence market. This growth not only enhances India’s economic stature but also strengthens diplomatic ties with importing countries. HAL exported two Hindustan 228 aircraft to Guyana Defence Forces and set up a new regional marketing office in Kuala Lumpur, Malaysia, in July 2023 to promote indigenous platforms in the export market. This regional office will serve as a hub for HAL’s engagement with other South East Asian Countries and also act as a window for other Indian Defence PSUs.
Economic benefits and growth of small and medium enterprises (SMEs)
The aerospace and defence sector, under Make in India, has fostered the growth of SMEs. With the emergence of the manufacturing ecosystem, HAL’s efforts have resulted in industry partners graduating from Tier III to Tier I. HAL aims to be a lead aerospace integrator, primarily through robust private partnerships. HAL has been supporting the private industries (including MSMEs), with more than 2,000 registered sub–contractors, by extending technical support and handholding. HAL has uploaded around 26,000 imported items in Srijan Portal to invite private vendors for indigenous development. HAL is also utilising private vendors in the design and development of systems; examples include Multi Function Display and Solid State Flight Data Recorder.
Job creation and skill development
Make in India initiative has created numerous job opportunities across the aerospace and defence sector. The demand for skilled labour in the aerospace sector has increased for production and assembly lines to high–end R&D. HAL has formed an Aerospace and Aviation Sector Skill Council (AASSC) to address the need for the development of a specialised workforce through skill development programmes and bridge the gap between demand and supply of skilled man power in areas like design and development, manufacturing, MRO, Airline Operations and Airports. The Make in India initiatives at HAL have been made possible due to the active support extended by all stakeholders lite lndian Defence Services, DRDO, ADA, ADE, RCMA, DGAQA, DGCA, industry partners and MSMEs. The success of HAL under Make in India has been fuelled by the inflow of orders from the government. This is a testament to the power of well executed industrial policy in shaping the nation’s defence and economic future.
