New Delhi: Lockheed Martin‘s offer to shift its lone Texas F-16 assembly line to India comes with an added strategic advantage to Prime Minister Narendra Modi: a possible veto to block exports to its nuclear-armed troublesome neighbour Pakistan.
At least three persons with direct knowledge of Lockheed Martin’s pitch to India, made first in April this year in New Delhi during meetings by Obama administration’s Pentagon officials, said if India agreed with the American aircraft maker’s proposal, that could mean the end of the road for Pakistan on its future F-16 procurement.
It would also empower India under Modi to arm-twist Pakistan by refusing to export the aircraft and its components to Islamabad. If F-16s are made at a facility in India, even under a 100 per cent wholly-owned subsidiary of Lockheed Martin, the end product would be subject to export control regulations of both the U.S. and India.
That’s the kind of veto Modi may be able to exercise, even if it is to block supply of certain components for all future F-16s. A Lockheed Martin official, who did not want to be identified as the information is not yet public, said that “some components of F-16 would be entirely made in India”. That’s a problem Pakistan may have to face forever regarding its own F-16s that are flying for decades now.
“What we are doing is putting India at the center of the supply base,” Lockheed Martin Aeronautics Business Development Director Randall Howard said on Aug. 4 in New Delhi.
“It is unprecedented that Lockheed Martin is able to bring this offer of shifting the production line from Fort Worth, Texas in the U.S. to India — not just for India or just from India, we are talking about exporting to the world to every customer, going forward,” Howard said.
Lockheed Martin is competing with another American plane maker Boeing and Swedish defence firm Saab that have offered their F/A-18 and Gripen E respectively for a ‘Make in India‘ programme. It is not yet clear which of the three offers is of interest to the Indian government. In April 2015, Modi had decided to scrap a 2007 tender for 126 combat planes in which French Dassault Aviation‘s Rafale was declared the winner in 2012.
Then talks for contracting the 126 planes, of which 108 were to be made at the Indian public sector Hindustan Aeronautics Limited, had been irrevocably stalled over price negotiations, defence offset obligations and performance guarantees. In Paris for a summit meeting with French President Francois Hollande, Modi announced that India would buy 36 Rafales instead in a government-to-government deal.
By this offer to shift its lone production unit to India, Lockheed Martin will keep the F-16 programme alive beyond late 2017, when it may have to close down the Fort Worth production line in Texas, U.S. permanently.
“We have deliveries (of F-16s) right now that take us out to late 2017. Our company is in conversation with the U.S. government for the next set of deliveries. Once that programme gets formally approved under the U.S. government process, that production programme, we believe, will deliver airplanes till 2021,” Howard said.
Lockheed Martin will also ensure that it keeps some part of the F-16 global business for itself and its committed global suppliers for another 40 years at least, if India decides to take this offer.
Thus, Lockheed Martin wants to convert its most obvious disadvantage into its biggest strength in the race to supply at least 90 combat aircraft to India’s air force: The oft repeated criticism that it has supplied F-16s to Pakistan, which has been flaunting it as its most potent air defence platform against India. It also has tried to sidestep the criticism of being an old 4th generation technology by offering its latest F-16 Block 70 aircraft for domestic production in India.
The Lockheed Martin’s pitch to India comes at a time when Pakistan’s ties with the U.S. have turned frosty. Pakistan Air Force has been a key customer of F-16s for the company with blessings from the U.S. administration. But not any more.
“Today, there is no potential Pakistan sale. That potential sale has expired. I can only speculate about the future. Going forward, as part of the consideration, the production line will be set up in India. I am now bothered about what’s happening at present, not what happened in the past or what will happen in the future. There are F-16 outside of the U.S. as well, isn’t it?” Howard said.
A news agency report from Washington on Aug. 4 said Pentagon has blocked a $300-million military aid to Pakistan. The U.S. government’s decision in this regard came after Defense Secretary Ashton B. Carter declined to give a certification to the U.S. Congress that Pakistan is taking sufficient action against the dreaded Haqqani network.
Miffed with the US decision to block funds to buy more F-16s, Pakistan has said it would consider to buy used F-16 jets from Jordan.
“We are not looking at just assembling India’s F-16 here. We are looking at establishing a complete manufacturing base ecosystem here,” said Abhay Paranjape, Lockheed Martin’s National Executive for Business Development in India in New Delhi.
“We are looking at transferring the entire production from our existing facility at Fort Worth, and exporting the aircraft from here. What that means is also that we have vested interest in seeing that this succeeds.”