India Finalises $5.46B Deal For 83 Tejas Jets  

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The Indian Air Force has concluded a $5.46 billion (INR 39,000 crore) deal with India’s state-run Hindustan Aeronautics Limited (HAL) for 83 Light Combat Aircraft Tejas at the cost of $65.78 million (INR 469.5) crore per jet.

“With the contract price now settled at INR 39,000 crore, the procurement file is being sent to the Cabinet Committee on Security for final nod. It should be cleared before this fiscal ends on March 31. Once the contract is inked, HAL promises to begin deliveries of the Mark-1A jets in three years,” a source was quoted on 17 February 2020.

Earlier, the contract was pegged at $7.91 billion (INR 56,000 crore). The reduction in cost has come after hard-nosed negotiations spread over a year between the IAF, the defense ministry and the manufacturer.

“HAL, for instance, was even charging profit on imported components. Item by item, the cost was brought down. IAF also cut down some of its support requirements,” the source added.

The defence PSU Hindustan Aeronautics Limited (HAL) has provided the Indian Air Force with 83 Tejas fighter aircrafts at a reduced cost of Rs 39,000 crore. Earlier, the cost of this deal was Rs 56,500 crore. The reduction by approximately Rs 17,000 crore came after a round of exhaustive negotiations and deliberations between the two parties.

According to a source, the procurements file will now be sent to the Cabinet Committee on Security (CCS) for the final stamp of approval now that the deal has been finalised in Rs 39,000 crore. It is being reported that the file could be cleared before March 31. After the contract is finalised, HAL could start the deliveries of Mark-1A jets in 3 years, according to a Times of India report.

Tejas Mark-1A jets are likely to come with 43 upgrades over the Mark-1 jets. These improvements are  improving maintainability, AESA (active electronically scanned array) radar, air-to-air refueling, long range beyond visual range (BVR) missiles, and advanced electronic warfare aimed at jamming the enemy’s radars and missiles.

The Defence Acquisitions Council first approved the induction of 83 Tejas fighter aircrafts at a cost of Rs 49,797 crore in 2016. The HAL responded with a quotation of approximately Rs 56,500 crore and this allegedly led to prolonged negotiations over cost.


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