The GOI has stopped competition. It owns the organisations involved in fighter development and production. It funds them. It will buy from the production company it owns. It is a monopoly situation. Producers enjoying a monopoly are not forced to compete and produce more efficiently to maintain sales as other companies are forced to produce more efficiently to maintain sales in a competitive market.
The position in India is not helped by the sole buyer of Indian fighters being the owner and financier of the sole producer. If the sole producer quoted 100 million to produce something where other companies would quote 70 or 80 million, the sole buyer may choose to order from the company it owns rather than than to order from a more efficient producer. Under those circumstances attempting to compete with the 'preferred supplier' cannot work. Not a risk worth taking.
If your view continues to prevail, expect the results achieved since LCA was started to prevail.
A rational consumer aims to get the greatest satisfaction from money spent when purchasing. It is rational to buy from an efficient producer.
I welcome a response but I hope that you incorporate some economics to support what you say in your response.
Let's not go in circles.
I told you briefly that economics of capitalism, communism, socialism are different. So you belonging to capitalist nation, should not expect full capitalism in India. Beyond that i'm not MBA or MA in economics. I can't tell you best business model.
Yes it is a DPSU monopoly situation but
IAF is very upset with HAL, etc & GoI's global image is impacted. So GoI is sandwiched b/w DPSUs & private sector. Hence
GoI has launched startups encouragement schemes of all types & every level. You can check "Bharat Shakti" YouTube channel hosted by veteran journalist Nitin Gokhale. They do floor visits of PSU & private firms in Aerospace & defence, old & new.
I got your point on sole buyer, sole producer, but India is not communist, so i don't think GoI itself being frustrated has stopped Tata, Ambani, Adani kind of people, unless you can share statement on GoI website.
Either these tycoons don't have ADA/DRDO kind of team or they don't wan't to venture into R&D. All they can do is assemble existing jet or make components for new one like AMCA. In that also they're crying.
As an Indian citizen & a techie i would expect these tycoons to come up with a preliminary design CAD at least 1st to showcase their competency & then demand profit, fame, etc. If they can't do it alone then form a conglomeration & share the work & risk. Othewise make the components & remain happy.
How about ATAAC (Ambani - Tata - Adani Aeronautical Conglomeration)?
They can still pitch for 5+gen TEDBF, 6gen & UCAVs.
And suppose if they can build a better jet & still GoI/IAF rejects it with invalid reasons then it'll topple the govt. without possibility of getting re-elected.
But remember 1 thing that in India or a soicalist mixed economy the private sector can never become a dictator/regulator. It is a very fundamental thing. Even with West it is G2G deals.
You can see examples of Indian Railways, Air India, etc where parts of the business have been privatised like food catering, etc.
So GoI can -
- neither compromise national security,
- nor support PSUs blindly anymore,
- nor let private sector dominate,
- nor leave them behind.
let's wait & see. What else can we do?
