4 minute readNo, the F-16 isn’t about to be built in India just yet

Ratan Tata, (Chairman, Tata Sons), Sukaran Singh, (CEO of Tata Advanced Systems Limited), George Standridge (Vice President of Strategy and Business Development, Lockheed Martin Aeronautics) and Orlando Carvalho (Executive Vice President, Lockheed Martin Aeronautics) at the Paris Air Show on Monday | Photo: Lockheed Martin

Twitter was excited on Monday over a Reuters report about the conclusion of an agreement between U.S. defense and aerospace giant Lockheed Martin and Indian conglomerate Tata for the production of the iconic F-16 fighter aircraft in India.

The report gave the impression that the F-16 would be produced in India following this agreement. Admittedly, this is not the first time media has reported that the F-16 will be built in India with the Tatas.

But let’s back up a little bit.

A statement from Lockheed Martin said, today, “Lockheed Martin and Tata Advanced Systems Limited (TASL) signed a landmark agreement affirming the companies intent to join hands to produce the F-16 Block 70 in India.”

This intention was apparent last year. But this tie-up does not mean anything, by itself. At any rate, there’s the minor matter of getting an order from the Indian Air Force (IAF).

Not only was there no tender when Lockheed Martin first announced its intentions last year, the process for manufacturing new fighter aircraft in India has also been since laid out.

This process was published last month in a document known as Chapter 7 of the Defense Procurement Procedure of 2016 (DPP 2016). The idea is to promote private industry in India.

Chapter 7 outlines a process for the domestic manufacturing of four sets of defense systems: fighter aircraft, submarines, helicopters and armored vehicles.

This chapter is a departure from the usual acquisition process under the DPP and requires the prime vendor to be an Indian company, which will be a strategic partner to a foreign Original Equipment Manufacturer (OEM), such as Lockheed Martin.

This chapter dictates two parallel processes that will culminate in the production of a fighter aircraft. The first is a tender or Request For Proposal (RFP) to evaluate and select a fighter aircraft. The second is an RFP to select an Indian company to become the strategic partner for the production of this aircraft.

Both selections will be carried out by the Indian defense ministry.

An agreement signifying intention, like the one between Lockheed Martin and Tata, is nothing more than a statement of preference at this point.

And the process stipulated above has not even been initiated, yet.

The defense ministry has to float Requests For Information, Expressions of Interest and the Requests For Proposal for both these parallel processes. The defense ministry will then mandate an ‘arranged marriage’ between a foreign OEM and an Indian domestic company.

While other Indian companies will be competing to become the Indian strategic partner for fighters, it is not inconceivable that the companies ultimately selected by the defense ministry might well be Lockheed Martin’s competitor, Saab, and Lockheed Martin’s partner today, Tata. Sweden’s Saab manufactures the Gripen fighter, the other option in this two-way contest.

As things stand, Lockheed Martin expects to deliver the last F-16 on order in the third quarter of this year. The company is also reported to be moving its F-16 production line from Texas to South Carolina.

Given all of this, the excitement over India-made F-16s is premature, not to mention talk of exporting the fighter from India. It is important to remember that any exports from India require an Indian assembly line, which is contingent upon an Indian order.

This agreement comes a few days before Prime Minister Narendra Modi meets President Donald Trump on his first visit to the U.S. under the new administration, and might bring attention to a possible deal on the F-16 between the two countries.

In context, the PM’s surprise decision to formally request the sale of 36 Rafale fighter aircraft on his first visit to France in April 2015 is not difficult to remember.

Agreements in Paris might be happenstance, but care should be taken to allow India’s own processes to run their course.

  1 comment for “4 minute readNo, the F-16 isn’t about to be built in India just yet

  1. Apan
    August 20, 2017 at 10:44 am

    Yeah, donald like very much to transfer the production to India. (i think not)

So what do you think?