In the design phase of the Ajeet, HAL redesigned several aspects of the aircraft while seeking to improve both the reliability and effectiveness of several subsystems, such as the avionics and hydraulic systems.

The adoption of a wet wing expanded the fighter's internal fuel capacity and freed-up several underwing hardpoints for other purposes, effectively increasing both the range and payload capability of the aircraft.

During the 1950s, the government of India had come to an agreement with the United Kingdom to procure a large number of Folland Gnat fighters, a light combat-capable jet-propelled aircraft, for the Indian Air Force (IAF).

In addition to the acquisition of British-built Gnats, the type was also manufactured under a licensing arrangement in India by aviation company Hindustan Aeronautics Limited (HAL).

Although the original revision of the requirement had called for the type to be produced to function as an interceptor, it was subsequently modified to incorporate a secondary ground-attack role for the new model as well.

[6] According to a report by the Public Accounts Committee of the Indian Parliament, the IAF officials tasked with overseeing the programme lacked realistic concepts of what was involved in the development process nor firm ideas on what the aircraft was required for.

[8] In support of the development programme, HAL decided to modify the final pair of Gnats on the production line to serve as prototypes for the Ajeet.

The flight testing phase of the programme reportedly validated the success of the re-designed aircraft, leading to a production order being placed for the Ajeet.

[9] The twin factors of the anticipated imminent phaseout of the Ajeet fighter and pessimism over the project's value from officials heavily contributed to the trainer initiative being curtailed without any further examples being produced.

The HAL Ajeet was a jet-propelled light fighter, primarily intended to function as a low-level interceptor aircraft, while also being capable of ground-attack missions.

[2] However, also according to Smith, the Ajeet benefitted both from the positive combat reputation garnered by the Gnat, as well as for its relatively low radar cross-section (RCS).

[2] Having fallen out of political favour, fewer than a hundred Ajeets were ultimately procured and the whole programme was effectively terminated barely a decade after its initiation.

Data from Jane's All The World's Aircraft 1982–83[12]General characteristics Performance Armament Avionics An Ajeet and four privately owned Gnat T.1s portrayed the fictional carrier-based "Oscar EW-5894 Phallus" tactical fighter bombers flown by US Navy pilots in the 1991 comedy Hot Shots!.