Relocating F-16 Production to India

Lockheed Martin announced in advance of a U.S. visit by Indian Prime Minister Narendra Modi that it had struck a joint-venture agreement with Tata Advanced Systems to move its F-16 production line to India.

This deal would be contingent on the Indian Air Force selecting the F-16 to fulfill a new requirement for 100 to 250 new single-engine fighters, which could total up to $13 to $15 billion. If the agreement does come through—the major competitor remains the Swedish JAS 39 Gripen E fighter—then India would become the exclusive producer of an advanced new Block 70 variant of the iconic fighter jet, and might also export the type to countries such as Bahrain, Colombia and Indonesia.

F-16

Entering service in 1978, the F-16 Fighting Falcon—now popularly known as the Viper—is a lightweight, short-range multirole fighter renowned for its agility. More than three thousand Vipers will be used in the air forces of twenty-seven countries this year. The Viper has seen plenty of action over the decades, and is credited with shooting down seventy-six aircraft in air-to-air combat in exchange for one or two losses by one count.

While there are larger twin-engine fighter jets like the F-15 Eagle that can go faster and farther and carry heavier combat loads, the Viper is more manoeuvrable and can still perform the majority of combat missions just as well at a lower price. For example, by one accounting an F-16 costs $22,000 per flight hour, compared to $42,000 for the F-15.

Analysis

Why does India need it?

India needs to replace over 200 aged MiGs that are already pushing the date of expiry. The Russian-supplied MIGs have faced criticism over the years for alleged malfunctioning and frequent crashes that have killed scores of Indian pilots.

Steeply escalating costs, poor after-sales service and a lack of sophisticated military equipment are the reasons cited by some analysts for the shift away from Russia. The F-16s are said to be up against competition from Sweden's Saab group and its Gripen jets.

F-16s have dominated the global market for years and it remains the backbone of the US Air Force's frontline air fleet. The US Air Force recently announced plans to extend the structural service life of up to 841 of its F-16s.

Are there other risks for India?

Russia has long been considered a close ally to India. For decades India has bought Russian armaments to fulfil its military needs. But India's suggested pivot towards the US has derived sharp criticism from some quarters. The feeling among the sceptics is that such closeness could cost precious Russian goodwill and Russia could get close to India's arch rival Pakistan. The Russians might not be in contention in the single engine aircraft race because they have nothing to offer. 

Assessment

Our assessment is that Lockheed Martin offering to set-up complete manufacturing base in India (for future exports as well) is also a significant factor. It will boost the domestic sectors, which is currently lagging behind and will also boost India globally. ­