As the Narendra Modi government in New Delhi announced sweeping reforms to Foreign Direct Investment (FDI) rules and permitted up to 100% FDI in defence sector, American defence equipment manufacturer Lockheed Martin (LM) has shown interest in producing F-16 fighter jets in India.

A senior LM official has said that they are ready to take advantage of the new liberalised FDI conditions announced by the Indian government on June 20. Speaking at a press conference in Bethesda, Maryland on Thursday, he said that LM welcomed the Modi government’s decision “to open the Indian market”. The official, who wished to remain anonymous, stressed that it was a historic move that would help the Indian Air Force (IAF) deploy legendary American fighter jets.

Meanwhile, the LM official admitted that the historic shift in India’s military posture might have an impact on the South Asian country’s relations with neighbouring China and Pakistan. He told the press that New Delhi’s announcement was not a surprise, as Prime Minister Modi had announced that his government would set up an assembly line for F-16 fighter jets in India during his visit to Washington earlier this month.

LM is keen to manufacture F-16s in India as early as possible in order to stop France from entering the Indian market. As India’s negotiations with the French government for the purchase of 36 Rafale fighter jets haven’t succeeded yet in securing a competitive price, the American global aerospace, defence, security and advanced technologies company has started trying to shift its F16 production line, lock, stock and barrel to the country.
The official told the media: “This will serve the twin purposes: it will be a success story of Prime Minister Modi’s ‘Make In India’ initiative, plus it will address the Indian defence establishment’s requirement of a new fighter fleet.” Earlier, Indian Defence Minister Manohar Parrikar hinted that New Delhi would soon allow a foreign military firm to manufacture fighter jets in India. “I am not looking for assembly at all. I am looking for a company to join with an Indian partner and to start manufacturing here by Transfer of Technology (ToT) in most of the items. I know that 100% ToT may not be possible and 100% indigenisation is not possible. Even with so many efforts, LCA has only around 40 per cent indigenisation,” the minister had said.

Apart from the US and France, several other foreign defence firms, including the Eurofighter consortium and Sweden’s Gripen, are interested in setting up assembly lines in India. In April, both LM and Boeing from the US discussed the possibility of producing jets with top Indian officials in New Delhi in the presence of Pentagon’s Director (for International Co-operation) Keith Webster. While Lockheed proposed to manufacture F-16, Boeing offered to make F/A-18s.

Koushik Das, based in the Indian capital of New Delhi, is a senior news editor with more than 15 years of experience. He also runs a blog - Boundless Ocean of Politics. E-Mail: [email protected]