Hindustan Aeronautics Limited (HAL) and Russia’s Public Joint Stock Company United Aircraft Corporation (PJSC-UAC) executed a significant Memorandum of Understanding in Moscow on October 27, 2025, to manufacture the SJ-100 civil commuter aircraft in India. This agreement represents the first major project in nearly four decades to manufacture a fully functional passenger aircraft in India, a development that has the potential to turn around the country’s aviation sector and redefine India-Russia industrial collaboration in the civil sector.
At a time when access to Western technology and customers has been severely curtailed, India provides a reliable partner and a significant export market for Russia, which is currently under the pressure of mounting Western sanctions.
The Protracted Struggle of Civil Aircraft Manufacturing in India
India has never developed or produced a large-scale civil passenger aircraft, despite being one of the world’s fastest-growing air travel markets. Hindustan Aeronautics Limited, India’s aerospace flagship, has a distinguished history in the production of defense and transport aircraft, such as the Tejas fighter, Dornier-228, and sophisticated helicopter platforms. However, the company has yet to achieve success in the civil jet manufacturing sector.
The The only precedent is from the early 1960s, when HAL produced the AVRO HS-748 passenger aircraft under a license from the British company Hawker Siddeley. India’s aerospace industry has primarily focused on the assembly of military aircraft and the production of limited civilian components since 1988, when production of that aircraft terminated.
The rationale is structural. Historically, the emphasis of India’s aviation ecosystem has been on defense contracts and maintenance, repair, and overhaul (MRO) services, rather than the design-to-certification cycle for passenger aircraft. The production of such aircraft necessitates a rigorous certification ecosystem, sophisticated composite fabrication, flight testing infrastructure, and a complex network of Tier-1 and Tier-2 suppliers. India’s aerospace sector has been unable to progress beyond components and assemblies due to the absence of a fully fledged supply chain and commercial aircraft design capability, despite the presence of substantial aerospace talent.
A New Opportunity in a Growing Market
The domestic aviation market in India is experiencing significant growth. Within the next decade, the nation’s airlines are expected to transcend 500 million passengers annually, and they collectively have more than a thousand aircraft on order. However, the majority of the jets that transport passengers in India today are imported, with Airbus and Boeing being the primary manufacturers.
The government’s UDAN scheme, which subsidizes routes to underserved communities, is driving an increase in demand in the regional segment, where smaller jets operate under 1,000 kilometers. According to HAL, India will require a minimum of 200 aircraft in the 70-130 seat class for regional connectivity over the next ten years, and approximately 350 additional aircraft to serve neighboring international routes in the Indian Ocean region.
This generates an immense market opportunity. India can satisfy domestic demand, create specialized employment, and decrease its dependence on expensive imports by localizing the production of regional jets. Additionally, India could establish itself as a regional exporter of affordable, short-haul aircraft to the Indian Ocean nations, Africa, and South and Southeast Asia through localized production.
The SJ-100: Russia’s Response to Western Sanctions
UAC in Russia developed the SJ-100, formerly known as the Sukhoi Superjet-100, a twin-engine narrow-body regional jet. Since the early 2010s, the aircraft has been in commercial service with airlines in Russia, Mexico, and numerous other countries, accommodating approximately 90 passengers. Nevertheless, its export success has been restricted by its substantial dependence on Western components, notably engines and avionics, which are supplied by European and American companies.
The implementation of Western sanctions in 2022 deprived Russia’s civil aviation industry of access to these supply chains. Western sanctions restricted the importation of spare parts, delayed aircraft deliveries, and made maintenance more challenging. To ensure its survival, the Russian government implemented a substantial import-substitution initiative to create domestically manufactured substitutes for Western components.
The maiden flight of the import-substituted version of the SJ-100 completed successfully in 2023, with Russian systems replacing foreign ones. The fully indigenous version, which was equipped with Russian PD-8 engines, took to the skies in 2025, signifying a major victory for the country’s aviation sector. Nevertheless, bulk production continues to be a challenge as a result of the economic strain resulting from sanctions and the limited capacity.
Collaboration with India provides a lifeline for Russia in this context. UAC can continue to manufacture the aircraft for both the Indian and regional markets while evading Western export restrictions by relocating a portion of the manufacturing or assembly process to India. It also allows Russia to capitalize on the increasing demand for regional aircraft in India at a time when its production volumes are unable to be sustained solely by domestic orders.
The memorandum of understanding between HAL and UAC
The MoU agreed in Moscow defines the collaboration between HAL and UAC for the production of the SJ-100 in India. HAL will be granted the authority to produce the aircraft for Indian customers subject to the agreement. The collaboration is anticipated to establish a localized production ecosystem for civil aircraft in the nation.
“This initiative will be a paradigm changer” for short-haul connectivity under the UDAN scheme, according to HAL.” The aircraft’s seating capacity and range render it highly suitable for connecting Tier-2 and Tier-3 locations, where the use of large narrow-body jets is uneconomical. HAL has underscored the partnership’s foundation on decades of mutual trust, which has been established through decades of collaboration on defense aircraft upgrades, including the Su-30MKI and MiG-21.
The SJ-100 will be the first complete passenger aircraft produced in India since the AVRO HS-748, a historic milestone for Indian aviation, if it is effectively executed. The initiative also serves as a representation of India’s increasing aspiration to transition from a defense-centric aerospace industry to a dual-use civil-defense model.
What is the estimated quantity of “Made in India”?
HAL officials have stated that India will commence with assembly and gradually transition to localized manufacturing, although the exact production parameters have not yet been determined. The fuselage, wings, tail sections, and engines of the aircraft could be imported from Russia and assembled in India at the outset. In due course, Indian suppliers may assume responsibility for the production of sub-assemblies, interiors, and specific systems.
The strategy is consistent with India’s approach to other significant aerospace partnerships, such as the C-295 project for transport aircraft with Airbus, in which the initial modules are assembled locally prior to complete indigenization. In India, the capacity to manufacture sophisticated aerostructures, landing gear components, and cabin systems is already present. This capability has the potential to be expanded to encompass the manufacture of airframe elements, avionics integration, and flight control systems through investment and technology transfer.
A critical question arises regarding the use of Western systems in the SJ-100, a construction project in India. Thales and Honeywell’s Western avionics and the Franco-Russian SaM-146 engine were the foundation of the initial Superjet. The Russian import-substituted version currently employs domestic systems; however, these components may not be internationally certified. If HAL intends to market the aircraft beyond India, it may be required to incorporate Western-certified equipment, provided that export control regulations allow for such sourcing. This could increase the appeal of the Indian SJ-100 variant to international consumers, but it would necessitate meticulous adherence to sanctions laws.
The Impact of Sanctions on the Agreement
Western sanctions have significantly transformed Russia’s aerospace landscape. The export of aircraft, spare parts, maintenance services, and avionics to Russia has been prohibited by the European Union, the United States, and allied countries since 2022. The restrictions have prevented Russia from maintaining Western-built aircraft and have led to the suspension of a portion of its civil fleet.
In August 2025, Reuters reported that Russian aircraft manufacturers were unable to deliver all fifteen of the scheduled commercial jets due to a shortage of foreign components. In the interim, European media conducted investigations that disclosed Russia’s ongoing reliance on Western technology by revealing that the industry imported over one billion euros’ worth of aircraft parts through intermediaries since 2022.
Moscow expedited the localization of aircraft production under the UAC aegis in response to this crisis. The SJ-100 was the flagship of this initiative, having been rebuilt “from start” with local components after being cut off from Western supplies. However, due to the contraction of export markets and the constraint of domestic capacity, UAC sought a critical partner in India.
The agreement with HAL is beneficial to Russia in that it enables the country to internationalize its civil aircraft program, maintain the operation of production lines, and generate essential export revenue. Reiterating its narrative of technological independence and resilience, it also indicates that Russia’s aviation industry has the capacity to establish alternative partnerships beyond the Western sphere.
The Reason for India’s Need for This Partnership
This collaboration presents a strategic opportunity for India to enter a high-value manufacturing domain that has been dominated by the West for a long time, in addition to a new aircraft model. HAL and its suppliers would be able to acquire invaluable expertise in airframe integration, systems engineering, and certification procedures by producing a complete passenger aircraft, even under license.
India’s government has consistently articulated its objective of establishing the nation as a global center for aircraft manufacturing and MRO services. In a statement that reflects a broader shift from mere assembly to complete ecosystem development, the Civil Aviation Ministry has emphasized that “India desires to design, manufacture, and maintain aircraft in India.” The SJ-100 project has the potential to serve as a test case for this vision, similar to the way the Maruti-Suzuki partnership ignited India’s automobile industry four decades ago.
Economically, the initiative has the potential to create thousands of skilled jobs, bolster private aerospace suppliers, and attract additional investment from global OEMs. The cascading effects would encompass material suppliers, tooling firms, electronics manufacturers, and software developers who are involved in flight systems and simulation.
Challenges and Risks to Come
Many hurdles remain, regardless of the optimism. Certification is the initial step. In India, civil aircraft are required to undergo rigorous safety and airworthiness inspections by the Directorate General of Civil Aviation (DGCA). For export markets, it is preferable to obtain certification from international organizations such as the FAA or EASA. Extensive collaboration and documentation will be necessary to obtain certification for a Russian-origin design that was constructed in India.
Secondly, the supply chain for civil aircraft components in India is still in its infancy. Indian companies make parts for Airbus, Boeing, and Embraer, but it will take years to build a well-connected local network that can meet the needs of commercial jets. India must continue to expand significantly in the areas of precision manufacturing, quality control, and vendor development.
Third, the integration of Western systems into a Russian platform presents regulatory and geopolitical complications. Western export-control laws may prohibit the use of specific technologies in aircraft that incorporate Russian intellectual property. To maintain the aircraft’s competitiveness and avoid sanctions exposure, India will need to carefully navigate these restrictions.
Lastly, the issue of the market comes into play. Indian airlines generally favor aircraft that are globally supported, have a proved track record of performance, and are easily accessible for spare parts. Reliability, after-sales service, and cost advantages in comparison to established models such as the ATR-72 or Embraer E-Jets will be critical in persuading carriers to operate the SJ-100, even if it is manufactured in India.
A mutually beneficial arrangement for Russia and India
The HAL-UAC partnership is a pragmatic alignment of interests, despite these challenges. Russia acquires a reliable partner and access to one of the world’s fastest-growing aviation markets. India acquires technology, experience, and the opportunity to ultimately become a member of the group of nations that manufacture their passenger aircraft.
It demonstrates strategic resilience for both. India asserts itself as an emerging aerospace power capable of collaborating with multiple blocs — East and West equally — on high-technology manufacturing, while Russia demonstrates its ability to sustain its civil aviation program despite Western isolation.
The project’s success could establish the groundwork for more extensive collaboration in civil aviation, such as the collaborative design of next-generation regional jets, the indigenous development of engines, and the expansion of MRO capabilities. It would also enhance India’s geopolitical reputation as a nation that can effectively balance industrial advancement with strategic autonomy.
In conclusion,
The HAL-UAC MoU for the SJ-100 is more than an industrial agreement; it is a declaration of intent. It represents a strategic response by both nations to global realignments and represents the first step toward reviving India’s long-dormant dream of constructing its passenger aircraft.
This transaction presents an opportunity for India to learn, localize, and lead. Despite the sanctions, it is an opportunity for Russia to maintain its relevance in the global aviation market. The two nations are not merely constructing an aircraft; they are also building a new chapter in their partnership and have the potential to redefine the global aviation manufacturing landscape jointly.
The success of this collaboration will be contingent upon its commercial viability, certification, and execution. However, one thing is certain: the SJ-100 project has already taken flight as a symbol of ambition, resilience, and the shared pursuit of self-reliance in a turbulent world.
About the author
Joseph P. Chacko is the publisher of Frontier India. He holds an M.B.A in International Business. Books: Author: Foxtrot to Arihant: The Story of Indian Navy's Submarine Arm; Co Author : Warring Navies - India and Pakistan.
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