The HTT-40 will be an all-metal tandem seat aircraft powered by a 950 hp (708 kW) turbo-prop engine. In early 2012 the company forecast building 106 examples.[3]

By the middle of 2012 the aircraft's future was in doubt as the Indian Air Force ordered 75 Pilatus PC-7 Mk IIs to fill the role envisioned for the HTT-40. In September 2012 the Air Force indicated that it had formally rejected the HTT-40 for service based on its cost per aircraft being double that of the PC-7 Mk II, a proven aircraft already in service worldwide. An MoD official noted, "We would be willing to pay higher rates to build indigenous capability in strategic defence equipment. But can HAL argue that the capability to build basic trainers is strategically vital
HAL did not confirm the IAF announcement that it will not buy the HTT-40, nor would the company indicate whether the aircraft's development will be continued. A company spokesman said, "We treat all MOD issues/proposals as confidential...All our projects are conceived with national interest in mind though, at times, some of those take time to fructify".[4]

On 28 February 2015, it was reported that Indian defense ministry has selected 68 HAL HTT-40 trainers and 38 Pilatus trainers to replace its current trainer aircraft fleet stating that this move was "commercially viable".[7]

On 21 June 2015, HAL chose the Honeywell Garrett TPE331-12B turboprop to power the trainer.