ibusinesslines.com June 27, 2017

Lockheed in pact with Tata to build F-16s in India

20 June 2017, 10:08 | Kelvin Horton

Lockheed nears F-35 block buy deal worth more than US$37 billion: Sources

Lockheed nears F-35 block buy deal worth more than $37 bln: Sources

F-16 Block 70 fighter aircraft are the best match for Indian Air Force's requirement of single-engine fighter planes.


Technology transfers and overseas production lines are becoming more common in military deals as defense giants look to keep older production lines in business and increase sales abroad.

The Anil Ambani-led Reliance Group has already formed a joint venture firm with Dassault Aviation SA of France for the manufacture of 36 Rafale aircraft, which India ordered for $8 billion during Prime Minister Narendra Modi's trip to France in 2015.

F-16 fighter aircraft.

In addition to the opportunity of exporting the F-16s to other countries interested in the fourth-generation fighter, a successful deal will also give India access to an aircraft, which is claimed to be the "most advanced version of the world's most successful, combat-proven multi-role fighter".

President Donald Trump and Lockheed Martin Corp (LMT) are both on the same page when it comes to defense spending and delivering value for money for US taxpayers, CEO Marillyn Hewson told CNBC on Monday.

However, according to market analysts, moving the production of F-16 to India could make sense for Lockheed Martin only in case the Indian government agrees to order hundreds of these jets.

"Lockheed Martin is honoured to partner with Indian defense and aerospace leader TASL on the F-16 program". With more than 4,500 produced and approximately 3,200 operational aircraft worldwide being flown today by 26 countries, the F-16 remains the world's most successful, combat-proven multi-role fighter ever produced. It has been further affirmed when the USA national security adviser, Lt. Gen. McMaster designated the nation as the U.S.' major defense partner in April.

Modi's Make-in-India drive runs the risk of conflicting with US President Donald Trump's America First policy under which he has been asking companies to set up base in US for creating jobs instead of setting up factories overseas. This offers defense investors enough reason to root for more such cross-country defense partnerships in the coming days.

Accompanying that deal was a partnership agreement between Dassault and India's Reliance Group and a promise by Dassault to invest about half of the contract's value in India. GD and Northrop Grumman Corp.

TASL and Lockheed Martin are now trying to persuade the Indian government by offering a lucrative proposal.

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