The defence arm of the Tata Group has signed an agreement with American firm Lockheed Martin to produce and export new generation F-16 fighter aircraft, potentially kickstarting a mega `Make in India' project days ahead of Prime Minister Narendra Modi's first meeting with US President Donald Trump. The deal, signed at the Paris Air Show, is subject to the condition that the F-16 Block 70 fighter jet emerges as the winner of an Indian Air Force competition to procure more than 100 single-engine fighters.
The Tata Advanced Systems Limited-Lockheed Martin combine will compete with Sweden's Saab, which will offer its Gripen fighter aircraft for the requirement. Lockheed Martin will move its only operational line producing the F-16s from Texas to India if it wins the contract. The American company also sees a $15 billion export potential for the jet to other customers in the region. Industry executives said the agreement will give the Tata Group firm the ability to integrate Indian sensors and systems into the high technology Block 70 version of the US fighter jet.
Besides providing full service support for the F-16, the agreement will enable the Indian company to offer all future upgrades for the aircraft on its own.
The timing of the announcement assumes significance, coming as it does ahead of Modi's visit to the US, where he is also scheduled to meet Lockheed Martin CEO Marillyn Hewson, according to people familiar with the matter. Lockheed Martin has said the partnership will support thousands of jobs in the US, besides creating new manufacturing jobs in India. It has pitched the F-16 as a fighter jet that makes the best business case for India as well, pointing out that there are nearly 3,200 operational aircraft of this type worldwide.
The Maryland-headquartered company has offered to make India the hub for all service and support requirements of the F-16 fleet worldwide, even as its service centres in countries such as Turkey, which services the Pakistani Air Force, will continue to operate.
Saab is expected to be a keen competitor, offering the Gripen as a newer aircraft with more technology transfer. While the Swedish company has yet to announce an Indian partner, it is in talks with both the Mahindra Group and Adani Group for collaboration.