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Lockheed Eyes Tata to Help Land Next Big India Warplane Deal

  • India needs hundreds of fighter jets to replace aging fleet
  • Lockheed, Tata have joint venture to build cargo plane parts

Lockheed Martin Corp. is leaning toward the Tata Group as a potential partner to build its flagship F-16 as India looks to modernize an aging fleet of fighter jets.

“Naturally we would gravitate to Tata," George Standridge, Lockheed Martin’s vice president for Aeronautics Strategy and Business Development, said in an interview in New Delhi on Wednesday when asked about production of F-16s. “We know them well and we have worked with them well."

QuickTake India's Aspirations

Lockheed Martin, Boeing Co. and Saab AB are all maneuvering for the next big fighter jet contract in India, which may be announced sometime in the next year. India still needs hundreds of warplanes after Prime Minister Narendra Modi scaled back an order for Rafale jets due to disagreements over price.

About a third of India’s 650 fighter jets are more than 40 years old, putting the nation’s defenses at risk as neighboring China bolsters its military capabilities. Replacing them with planes made locally would improve security and help achieve Modi’s goal of transforming India from the world’s biggest weapons importer into a global hub for defense manufacturing.

Lockheed and Tata Advanced Systems Ltd. have had a joint venture since 2012 to build tail sections and center wing-box components for the C-130 cargo plane’s global supply chain. Tata Advanced Systems had no comment on a possible tie-up with Lockheed Martin to build F-16s, according to a spokesperson.

Rafale Deal

Since January, Indian government officials have listened to pitches from foreign manufacturers to build combat planes in India. No announcement has been made on either the timeframe or the quantity under consideration.

Any agreement is likely to be between governments, however, after a tender process for 126 warplanes that began in 2007 -- the world’s biggest fighter jet deal at the time -- has yet to be concluded.

India picked Paris-based Dassault Aviation SA in 2012 to build the planes at an estimated cost of about $11 billion. Yet talks stalled over price and quality guarantees, and Modi decided last year to instead buy only 36 of the fighter jets directly from the French government. The deal is still being finalized.

For an analysis of why Modi scaled down the Rafale deal, click here.

Lockheed Martin has been in talks with the U.S. government over producing in India for more than a year, Standridge said.

‘Ready to Go’

"We are ready to go with the Indian government when it is ready to go," he said. “We are engaging with the Indian government on a recurring basis to ensure we are responsive."

The U.S. and India have strengthened defense ties since Modi came to power. Last month U.S. Defense Secretary Ash Carter reiterated plans to help India develop jet-engine technology.

It would be feasible for Lockheed Martin to set up an F-16 assembly line if about 100 jets are to be produced for the Indian Air Force and for possible exports, Abhay Paranjape, a director for business development of the company, said in March.

Saab has proposed setting up a production facility in India for its Gripen aircraft as well as a development center for the plane, Ulf Nilsson, the company’s Head of Aeronautics, said in a March interview.

Boeing has also offered to manufacture its F/A-18 fighter jets -- the mainstay of the U.S. navy -- in India.

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