Wings of self-reliance: HAL and DPSUs fuelling India's aerospace growth

In the early decades of Independent India, the country faced the dual challenge of defending its sovereignty and creating a domestic industrial base. Recognizing that strategic autonomy could only be achieved through self-reliance, the Government of India established Defence Public Sector Units to manufacture critical defence systems and platforms within the country. Subsequently, India has transformed into a nation capable of designing, developing, and producing its defence platforms. Central to this transformation is the pivotal role played by Hindustan Aeronautics Limited ( HAL) in nurturing a robust and self-reliant aerospace and defence manufacturing ecosystem.

Over the past eight decades, HAL has graduated from licensed production of aircraft like MiG-21s and Jaguars in the 1960s and ’70s to the indigenous development of platforms like the Hindustan Fighter-24 Marut, Dhruv Advanced Light Helicopter (ALH), Rudra (ALH Mk IV), Light Combat Aircraft (LCA) Tejas, Prachand Light Combat Helicopter (LCH), Hindustan Turbo Trainer-40 and Light Utility Helicopter (LUH). Beyond its direct contributions to national security, HAL has played a catalytic role in shaping India's aerospace ecosystem by empowering MSMEs, private sector enterprises, academic institutions, and start-ups that now form the industry's foundation.

Make in India: A Turning Point
The "Make in India" (Aatmanirbharta) initiative, launched by the Hon’ble Prime Minister of India in 2014, brought new momentum to defence manufacturing. It prompted a policy shift that emphasized domestic procurement, fostered innovation, and required an increase in indigenous content for defence platforms. These initiatives include according priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP) 2020 which has led to a reversal of 70:30 import export ratio; announcement of 18 major defence platforms for industry led design and development in March 2022; notification of ‘Positive Indigenisation Lists’ for the Services and Defence Public Sector Undertakings (DPSUs), for which there would be an embargo on the import beyond the timelines.

But beyond technology, the true impact of this transition has been in how HAL opened its doors to the private sector, inviting, enabling, and empowering them to become co-creators of India’s aerospace future.

Building the Industrial Ecosystem: HAL as a Catalyst
HAL today functions not in isolation, but as the anchor of an ecosystem comprising more than 2,000 private industry partners ranging from large strategic partners to MSMEs. More than 55% of HAL’s procurement expenditure now flows to Indian industry. This deliberate shift is designed to expand capacity, enhance resilience, and infuse innovation across the supply chain.

HAL aims to be a lead aerospace integrator, primarily through robust private partnerships. As in the case of LCA Mk1A, HAL has partnered with private companies to manufacture major structural assemblies such as the front fuselage, centre fuselage, wings, and empennage. This model not only multiplies production throughout, but also ensures the transfer of critical manufacturing expertise to Indian firms, many of which have since graduated from Tier III to Tier I status. Many of these firms have progressed to become suppliers for foreign original equipment manufacturers (OEMs).

Furthermore, HAL has uploaded over 31,000 imported components on the SRIJAN portal for indigenization, actively inviting Indian vendors to develop them locally. This has significantly reduced reliance on foreign OEMs and strengthened the domestic manufacturing base.

Empowering MSMEs and Start-ups: A Strategic Priority
HAL recognizes that MSMEs are vital for innovation, employment, and local industrial capacity. To this end, the company has created structured vendor development programs to identify, support, and onboard smaller firms into its supply chain. Development orders, co-development projects, technical handholding, and mentoring are an integral part of the company’s long-term strategy to nurture high-potential suppliers.

Under the Innovations for Defence Excellence (iDEX) framework, HAL is also engaging with start-ups to adopt cutting-edge technologies like AI-based diagnostics, drone-based inspections, and advanced composites. These partnerships reflect a new era of collaborative innovation, where legacy DPSUs and agile start-ups come together to solve complex technical challenges.

By leveraging the ingenuity of small firms and the strength of institutional players, HAL is seeding a culture of innovation across the aerospace sector.

Infrastructure, Skilling, and Academic Linkages: Laying the Foundation
Building a self-reliant defence manufacturing ecosystem requires more than just industrial policy—it demands infrastructure, skilled human capital, and a shared vision across stakeholders.

HAL has invested consistently in all three. The advanced manufacturing and R&D facilities are supported by training institutions such as HAL Management Academy. These centres not only meet HAL’s internal needs but also serve as national resources for aerospace skilling.

To ensure the future success of India’s aerospace sector, HAL has formed partnerships with leading institutions like IITs and IIMs. This collaboration facilitates joint design and development, provides internships, and offers exposure to real-world projects. The company is also a driving force behind the Aerospace and Aviation Sector Skill Council (AASSC), to address the need for the development of a specialized workforce through skill development programs and bridge the gap between demand and supply of skilled manpower in areas like design and development, manufacturing, MRO, airline operations and airports.

HAL, in partnership with other companies, has moved forward to establish the Defence Testing Infrastructure Scheme (DTIS) at Uttar Pradesh Defence Industrial Corridor (UPDIC) and Tamil Nadu Defence Industrial Corridor (TNDIC). This avoids duplication of domain-specific test facilities and ensures optimum utilisation by industry partners.

Outcome of a Mature Ecosystem
The real test of any industrial ecosystem lies in its ability to deliver outcomes at scale, speed, and quality. In recent years, HAL’s platforms have experienced improved availability and shorter turnaround times, thanks to a diversified and locally sourced supply chain.

The increased confidence in India's manufacturing ecosystem has naturally opened doors to international opportunities. HAL has a basket of export-ready products and services for platforms in both rotary and fixed-wing domains, which are of interest to the Friendly Foreign Countries (FFCs). This reflects the maturity of the Indian aerospace ecosystem.

Looking Ahead: Deepening Public–Private Collaboration
India’s future defence programs, such as the Advanced Medium Combat Aircraft (AMCA), Indian Multi-Role Helicopter (IMRH), and advanced UAVs, are inherently more complex. Their success depends on an even deeper level of collaboration between all stakeholders, private players, start-ups, academia, and global partners.

HAL’s vision is to serve not just as a platform designer and manufacturer, but as a national integrator bringing together stakeholders across domains to create a defence ecosystem that is not only self-reliant but globally competitive.

The journey of India’s aerospace sector is not defined merely by milestones of aircraft production or technology breakthroughs. It is defined by the creation of a resilient, inclusive, and forward-looking ecosystem; one that is capable of meeting the nation’s defence needs and catalyzing broader aerospace ecosystem growth.

The author is Chairman and Managing Director, HAL


(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)