Hindustan Aircraft Company was incorporated on 23 Dec 1940 with the aim of manufacturing aircraft in India. Just after 3 months of its incorporation, the Government of India became one of the shareholders in the Company holding 1/3 of its paid-up capital and subsequently took over its management in 1942. Hindustan Aircraft Company commenced Its business of manufacturing of Harlow Trainer, Curtiss Hawk Fighter and Vultee Bomber Aircraft with collaboration with the Inter Continental Aircraft Company of USA,
In Dec 1945,the company was placed under the administrative control of Min. of Industry & Supply. In January 1951, Hindustan Aircraft Private Limited was placed under the Administrative control of Ministry of Defence.
The Company had built aircraft and engines of foreign design under licence, such as Prentice, Vampire and Gnat aircraft. It also undertook the design and development of aircraft indigenously. In August 1951, the HT-2 Trainer aircraft, designed and produced by the company under the able leadership of Dr. V.M.Ghatge flew for the first time. Nearly 200 Trainers were manufactured and supplied to the Indian Air Force and other customers. With the gradual building up of its design capability, the company successfully designed and developed four other aircraft named ‘Pushpak’ a two seater suitable for flying clubs, HF-24 Jet Fighter ‘(Marut)’, ‘Krishak’ for Air Observatory Post(AOP) role and the HJT-16 Basic Jet Trainer ‘(Kiran)’.
Meanwhile, in August 1963, Aeronautics India Limited (AIL) was incorporated as a Company wholly owned by the Government of India to undertake the manufacture of the MiG-21 aircraft under licence. In June 1964, the Aircraft Manufacturing Depot which was set up in 1960 as an Air Force unit to produce the Airframe for the HS-748 transport aircraft was transferred to AIL. Soon thereafter, the Government decided to amalgamate Hindustan Aircraft Limited, with AIL so as to conserve resources in the field of aviation where the technical talent in the country was limited and to enable the activities of all the aircraft manufacturing units to be planned and co-ordinated in the most efficient and economical manner.