Assess how far Defence PSUs like HAL have moved from licensed production to real indigenisation. Illustrate with aero-engine programmes.

India's Defence PSUs can now build aero-engines at scale, but they cannot yet design engines for frontline fighters. HAL's Koraput Division delivered its 2,000th aero-engine in October 2026 [1], and most of those engines were built to licensed foreign designs. HAL has moved towards real indigenisation, but only partly.

Progress: from assembly to local content and own design

• Scale and reliability: Koraput's engines have powered the MiG-21, MiG-27, MiG-29 and Su-30MKI. It has overhauled more than 9,000 engines and delivered 63 AL-31FP engines against a target of 60 [1].
• Rising local content: The 2024 contract for 240 AL-31FP engines is worth over Rs 26,000 crore. It raises Indian-made content to 63% by the last delivery, averaging over 54%, with MSMEs and private firms as suppliers [2].
• Home-grown design: The Shakti engine powers the Dhruv ALH and Prachand LCH helicopters, and a second production line is planned [1]. HAL's AERDC is designing the HTFE and HTSE engines [3].

Limits: built in India is not designed in India

• Licence trap: HAL builds the Su-30MKI under licence. Russia was late in handing over technical documents, so indigenisation "did not proceed as envisaged" and outsourcing raised costs [4]. Even at 63%, over a third of each AL-31FP is still imported [2].
• No indigenous fighter engine: DRDO spent Rs 1,892 crore over nearly two decades on the Kaveri, which still did not meet the needs of the LCA (Light Combat Aircraft). It weighed 1,235 kg against a 1,100 kg limit and ran over 12 years late [5].
• Execution gaps: The Su-30MKI overhaul facility was due in 2012 but was still not ready in 2014 [4].
• Foreign partners still needed: The IMRH helicopter engine will be co-developed with France's Safran [3].

Licensed assembly → Local content (AL-31FP, 54–63%) → Own design (Shakti, HTFE) → High-thrust fighter engine [GAP]

Indigenisation ladder: where HAL stands

DPSUs have moved beyond building to someone else's design. They now make more of the parts at home and design helicopter-class engines, but a high-thrust fighter engine is still missing. The planned AMCA (Advanced Medium Combat Aircraft) engine ecosystem includes about Rs 5,000 crore, superalloys from MIDHANI and India's first high-thrust engine test facility [1]. Two things should back it: full intellectual property rights for India in any co-development, and HAL's Maharatna financial freedom to develop Indian suppliers [6]. That would move defence self-reliance from "Make in India" to "Design in India".