A Landmark Agreement!

The agreement between Lockheed Martin and TASL reflects the confidence of the US aerospace industry in the growing capability of the Indian aerospace industry in the private sector.

Photo(s): By Lockheed Martin
By Air Marshal B.K. Pandey (Retd)
Former Air Officer Commanding-in-Chief of Training Command, IAF

 

(Seated left to right) Mr. Sukaran Singh, Chief Executive Officer and Managing Director of Tata Advanced Systems Limited, and Mr. George Standridge, Vice President of Strategy and Business Development, Lockheed Martin Aeronautics, sign a letter of intent to produce the F-16 Block 70 in India in the presence of Mr. Ratan N. Tata, Chairman Emeritus, Tata Sons and Orlando Carvalho, Executive Vice President, Lockheed Martin Aeronautics

As per a press release by Lockheed Martin Corporation on June 19, 2017 at the Paris Air Show, the US defence and aerospace major has entered into an agreement with Tata Advanced Systems Limited (TASL) of India to collaborate for the manufacture of the F-16 Block 70 combat aircraft in India under the Make in India programme of the Government of India. Quite understandably, this development has created a stir both in the Indian media as well as in the Indian aerospace industry particularly in the private sector. The F-16 is a single-engine fighter aircraft which is one of the two contenders in the race for induction into the Indian Air Force (IAF) in fairly large numbers. The other platform in the race is the JAS 39E Gripen from Saab of Sweden.

Tata Advanced Systems Limited (TASL)

Located in Hyderabad, India, TASL is a private sector company that has for some years been engaged in the manufacture of airframe structures for OEMs abroad like manufacturing cabins for the Sikorsky S-92 helicopter, manufacturing components for the airframe of the C-130J tactical transport aircraft and now has delivered to Boeing, the first crown and tail cone assembly for the CH-47F Chinook heavy-lift helicopter ordered by the Indian Ministry of Defence (MOD) for the IAF.

Single-Engine Combat Aircraft for the IAF

After the cancellation in 2015 of the tender for 126 medium multi-role combat aircraft (MMRCA) for which the Rafale from Dassault Aviation of France had been identified by the IAF as the preferred platform, in October 2016, the Indian Ministry of Defence (MOD) initiated a search for a single-engine combat aircraft to revitalise the depleted fleet of fighter aircraft in the IAF. The plan was to produce the selected platform in India to meet with the requirements of the IAF as also of other customers across the globe. In response, both Lockheed Martin Corporation and Saab of Sweden offered to set up their production facilities in India to manufacture the aircraft in the country in collaboration with an Indian company. As the US Air Force had decided not to procure F-16 aircraft any more, Lockheed Martin is prepared to relocate to India, its only production line in the US that was functional at Fort Worth in Texas. This was an attractive proposition as the F-16 was being operated by the air forces of as many as 26 countries in the world and there has been expression of interest in the platform from a few more.

Lockheed Martin Corporation has taken this step in anticipation of a positive outcome of the meeting between President Donald Trump and Prime Minister Narendra Modi.

The F-16 Block 70 on offer to India is the latest version of the aircraft and is a near fifth generation platform. Apart from adding muscle to the IAF, the F-16 option would provide a sizeable market for the new production facility in India, imparting the much needed boost to the Indian aerospace industry. It had seemed earlier that there might be reluctance from Donald Trump, the newly elected President of the US to shift production line of the F-16 to India as it might lead to loss of employment opportunities for the citizens of the US. However, Lockheed Martin on its part is of the view that relocation of the F-16 production line to India would not lead to loss of employment opportunities for the citizens of the US but on the contrary, it will create jobs for US citizens back home to support the production facilities in India. The US Government has decided to “take a fresh look” at the proposal and that is where the matter has been resting for the last few months.

Breaking the Logjam

It so happens that Prime Minister Narendra Modi is scheduled to visit the US from June 25 to 27 this year. During this visit, the Indian Prime Minister is expected to interact with the US President on a number of issues including in the regime of defence. There is hope that the issue of relocation to India of the production facility of the F-16 aircraft at Fort Worth, Texas in the US, will also be discussed and it is expected that the outcome of the talks will be positive paving the way for the MOD in India to progress further the case for procurement of a single-engine combat platform for the IAF in accordance with the Defence Procurement Procedure (DPP). The latest version of the DPP was released on March 28, 2016 at the DefExpo in Goa. However, there is also a possibility as well as hope in some quarters that Prime Minister Narendra Modi may be able to replicate in Washington, the success with the procurement of the Rafale MMRCA during a state visit to France in 2015. During his visit to Paris, Prime Minister Narendra Modi was successful in securing a direct deal with the Government of France for 36 Rafale jets for the IAF, eliminating the delay associated with the DPP. There is a possibility that Prime Minister Narendra Modi may be able to strike a similar deal for the D-16 with President Donald Trump.

Although the agreement that has been signed on June 19, 2017, between Lockheed Martin and TASL, does not in any way imply that the final decision on the procurement of the F-16 aircraft has been taken by the two governments involved, this step by the OEM will certainly breathe new life into the proposal. The agreement also reflects the resolve of Lockheed Martin not only to engage with the Indian aerospace industry, but also to bolster the combat fleet of the IAF. But more importantly, it reflects the confidence and optimism on the part of the OEM that the proposal to relocate the F-16 production line to India will be cleared by the US Government. With India being declared by the US as a Major Defence Partner, clearance of the proposal by the US Government will be a step in the right direction.

At the functional level, the agreement is clear evidence that the OEM has identified the Indian partner for the joint venture as also has formalised and documented the understanding between the two companies of their commitment to undertake joint production of the F-16 Block 70 aircraft in India as and when the final word on the subject in their favour is said. Lockheed Martin Corporation has taken this step in anticipation of a positive outcome of the meeting between President Donald Trump and Prime Minister Narendra Modi.

In the final analysis, the agreement between Lockheed Martin and TASL also reflects the level of confidence of the US aerospace industry in the growing capability of the Indian aerospace industry in the private sector.