Thoughts on the Lockheed-Tata agreement to produce F-16s in India

In this effort India may very well axe herself in her foot by providing a lifeline to Lockheed Martin in producing F16s that becomes a white elephant as soon as the first aircraft rolls off the production line.

The recent blooming of closeness between US and India can led to another deal between both countries; a billion dollar deal with India’s known TATA Group to relocate and produce F-16s in India. TATA Advanced Systems has been producing component parts for the American defence contractor’s C-130J military transport aircraft. It is being touted as a ‘win-win’ situation for countries, promising jobs and reaffirming confidence in each other.

This deal needs to be looked at a little more closely.

Yes India needs to replace her Russian provided MIGs that are way too old and reportedly passing the expiry date. The MIG jets are nicked as the ‘Flying Coffin’. In 2012, the Defence Minister’s statement in Indian Parliament that more than half of the 872 MIG Jets purchased from Russia are lost in accidents costing more than 200 lives. (Andrew North for BBC)

F-16 Block 70 aircraft in future, all going well between both the governments will only be produced in India. Though presently, F16s dominate the fighter aircrafts market globally, will the situation remain unchanged minimum a decade down the road needed to get production off ground?

The US Department on the other hand, is buying another lot of F-35 fighter jets from Lockheed Martin. The US government reportedly is expected to spend approximately $400bn in coming years on the production of 2,443 of these sleek beauties. This anomaly is interesting.

Should Lockheed-TATA manage to get the contract to set up the production facilities in India, itself a time-taking process; including the red-tape involved, the shortlisting of manufacturers and then the laborious task of setting up the manufacturing units. India is looking to a period of a decade give and take, before the first aircraft can roll off the production line.

With US already moving towards a smarter aircraft, after a decade, who will Lockheed-TATA be selling the F 16s to?  Reportedly at the moment roughly 26 countries are flying 3200 of these aircrafts, will the sale graph will be the same in a decade?

Sweden’s Saab has pitched in to produce Gripen fighter in India, though it has not yet entered into a partnership with a local production house in India. ‘Saab AB of Sweden, makers of Gripen fighter jets, is in talks with the Gautam Adani-led Adani Group for a manufacturing partnership.’ (Livemint, Tarun Shukla, Feb 16 2017)

There is a political angle to the production deal. Whereas, bilateral trade between India and Sweden is healthy with an estimated 150 Swedish companies already established in India with more coming in, providing jobs to roughly 7,50,000  Indians, India’s political leaning towards US in the past few years, and in particular with Trump becoming President is a part of new global alliances.

India desperately wants to be seen as the regional power Vis a Vis China which is not happening anytime soon. In this effort India may very well axe herself in her foot by providing a lifeline to Lockheed Martin in producing F16s that becomes a white elephant as soon as the first aircraft rolls off the production line.

For US it’s a positive all the way. She binds India closer thereby creating a dent in an important sector where Russia had the gains with India. It gets to create a challenge to China in her very backyard thereby taking a step in her efforts to delay China’s rise as a regional power and in line with Trump’s policy of “America First’ creates thousands of jobs for Americans.

On the other hand, India will be pushing Russia closer to Pakistan a likely result in light of upcoming CPEC and the fact that there is a drift between Pakistan and US, a chasm that seems to be widening with time. In a paradigm shift, the centre of focus is shifting to Asia and Russia is very much cognizant of the fact. The joint military excise between both countries in Khyber Pakhtunkhwa a few months ago is one indicator.

“Apart from military cooperation, Pakistan and Russia are also expanding bilateral cooperation on energy and infrastructure projects. Pakistan has taken the first step by offering Russia the use of Gawadar port which would help Russia to connect it to the rest of the world. It is expected that Moscow will use this port for exports and imports. Russia has also shown interest in China-Pakistan Economic Corridor (CPEC). Furthermore, Russia has also joined hands with Pakistan to counter terrorism. Russian Ambassador to Pakistan Alexy Y. Dedov has said that Russia will assist Pakistan in fighting terrorism by supplying military equipment.” (Re-shift in Russian Policy towards Pakistan: Balancing the Unbalanced: Institute of Strategic Studies April 5, 2017)

India needs to take a hard look into the deal. In a world of complex global alliances, many a pitfall awaits those who jump before they can learn to walk!