Private players get Rs 9,000-crore slice of Tejas deal, most companies from Karnataka | Bengaluru News – Times of India

BENGALURU: Of the Rs 46,898-crore order for Tejas jets placed with defence PSU Hindustan Aeronautics Limited, at least Rs 9,000 crore will go to private players, most of whom are from Karnataka.
Confirming this, HAL chairman and managing director R Madhavan said on Thursday: “If you remove the tax part of the contract, the deal is worth only about Rs 36,000 crore, out of which close to Rs 6,000 crore will directly go to MSMEs. And, since we are supplying ground support equipment and other things, another Rs 3,000 crore is expected to go towards Indian partners.”
HAL is to supply 83 Light Combat Aircraft Tejas Mark-1A in nine years, starting 36 months from Thursday. As on date, 463 vendors are partnering for the project, including about five tier-1 enterprises like L&T, Madhavan said. This number is expected to go up to 550-600 as more MSMEs will be coming in and pitching, he added.
Each Tejas fighter to cost Rs 309 crore
Of the current vendors, 230 are in Karnataka and 131 of them MSMEs. “In the coming years, Tejas will be the backbone of IAF and will contribute considerably to job creation in Karnataka,” he said. “The indigenous content in the aircraft is about 52% and HAL is looking at ways to increase it in the raw materials to 65%, which will also see more local partners added.”
A day after the deal, described by defence minister Rajnath Singh as the largest Make-in-India procurement order so far, was inked, HAL gave a break-up of the project. The basic cost of the fighter would be Rs 309 crore, while trainers would cost Rs 280 crore each. The order is for 73 fighters and 10 trainers.
“While Rs 2,200 crore is ERV (exchange rate variation), customs and taxes is around Rs 7,000 crore, so that makes it around Rs 9,000 crore. Rs 11,000 crore will be used for ground support equipment, spares and training aids and manuals… Minus these, the total order is worth only about Rs 25,000 crore,” he added. Madhavan said HAL is likely to deliver only two aircraft in the first year. “The first one should go out in March 2024. Then we will augment production capacity to 16 per year and hope to complete deliveries by eight years,” he said.

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Sagar Biswas

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