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Lockheed Martin: India and US Talk on Proposal to Build F-16s in India

February 17, 2017

U.S. defense company Lockheed Martin says talks are being held between the American and Indian governments on its proposal to manufacture F-16 fighter jets in India.

The comment by Lockheed's head of F-16 business development, Randall Howard, came at an air show in the Indian city of Bengaluru amid questions whether the company's proposal to produce fighter jets in India will run counter to U.S. President Donald Trump's opposition to American companies moving jobs and manufacturing overseas.

Lockheed Martin's F-16 and Saab's Gripen fighter plane from Sweden are regarded as the front-runners in getting a lucrative, multi-billion dollar contract for 200 to 250 jets for the Indian air force that New Delhi is expected to finalize sometime this year.

India has insisted that any foreign firm awarded the deal will have to collaborate and manufacture in the country with a local partner to boost its drive to build a domestic air production base. It is part of an initiative by the world's biggest arms importer to link its defense purchases, which could top $200 billion over a decade, to Prime Minister Narendra Modi's "Make in India" pitch.

Lockheed Martin last year offered to set up a manufacturing base for F-16s in India provided it is awarded a contract for the fighter jets that India wants to buy - a proposal supported by the former Obama administration. In fact, the company had proposed to make India the sole producer of the single-engine combat aircraft, which is being phased out in the United States, but for which it is seeking markets in other countries.

Amid uncertainty about the new U.S. government's policy, Lockheed Martin has said in Washington that the Trump administration will want to take a "fresh look at some of these programs" and that it is "prepared to support that effort to ensure that any deal of this importance is properly aligned with U.S. policy priorities."

Inaugurating the air show earlier this week, Indian Defense Minister Manohar Parrikar said no exceptions will be granted to setting up a facility to produce planes in India, and it is up to companies making proposals to get clearance with their governments. "That is my requirement," he said.

India, once heavily dependent on arms purchases from Russia, has diversified its purchases in recent years and defense imports from the United States have grown quickly in recent years.

India's huge appetite for defense purchases to modernize its armed forces attracted the world's top defense companies to the air show.

Among them was Sweden's Saab, which showcased its fighter jet at the air show, and which reiterated its commitment to establishing what it called a world class aviation facility in India to manufacture the Gripen both for India and the global market.

Pitching for its Gripen aircraft, sales director Kent-Ake Molin told reporters ahead of the air show that "what we are offering is a futuristic, new generation plane and not one that is reaching the end of its life."

Besides manufacturing, India has insisted on transfer of technology as part of its efforts to build a domestic production base and end its dependence on costly defense imports.

That was not expected to be a roadblock with the F-16 as American and Indian defense ties have grown in recent years.

Anit Mukherjee, assistant professor at the S. Rajaratnam School of International Studies in Singapore said the deal "will be an important topic of conversation between senior defense officials in both countries in the next few months." He points out that although "there is a general element of unpredictability around President Trump," it is widely believed that U.S.-India defense ties will be marked more by "continuity than disruptive change."

While that may be the case, defense analysts in India believe uncertainty clouds the future of the proposal to make F-16s in India. "This is going to be in direct conflict with (Trump's) America First," says Amit Cowshish with the New Delhi-based Indian Institute for Defense Studies and Analyses, who was a former financial adviser to India's Defense Ministry.

From India's standpoint, he says any deal for fighter aircraft will have to be contingent on local manufacturing. "For this government to go back on it and say that we are just going to buy it off the shelf, or go with some screwdriver technology, it is not going to go down well either with their own philosophy or with the services."

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