A Lockheed Martin F-16 of the Turkish Air Force performs during an acceptance flight at the upcoming ILA Berlin Air Show in Selchow near Schoenefeld south of Berlin on May 19, 2014. Photograph: (Reuters)
American aerospace giant Lockheed Martin signed an agreement with Tata Advanced Systems on Monday to produce F-16 fighter planes in India, pressing ahead with a plan to shift its Forth Worth plant in Texas to fulfil the PM Modi-led government's condition that foreign suppliers would have to make planes in India with a local partner.
India will also have the chance to export the F-16 that is flown by air forces around the world, the joint statement said.
"This unprecedented F-16 production partnership between the world’s largest defense contractor and India’s premier industrial house provides India the opportunity to produce, operate and export F-16 Block 70 aircraft, the newest and most advanced version of the world’s most successful, combat-proven multi-role fighter," the statement said.
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 abroad.
In announcing their agreement at the Paris Airshow, Lockheed and Tata said moving the production base to India would still retain jobs in the United States.
"F-16 production in India supports thousands of Lockheed Martin and F-16 supplier jobs in the US, creates new manufacturing jobs in India, and positions Indian industry at the center of the most extensive fighter aircraft supply ecosystem in the world," a joint statement by the firms said.
The agreement will enable Lockheed Martin to win billions of dollars worth of order from the Indian military, Reuters reported.
India's air force needs hundreds of aircraft to replace its Soviet-era fleet. Lockheed has offered the Block 70 model to India, the most modern of all the F-16s.
Sweden's Saab is also in competition for supplying planes to the Indian Air Force and has offered to make its Gripen fighter in India. It has not yet announced a local partner for the plane which it has pitched as a modern alternative to the F-16s, Reuters reports.
Currently, 3,200 F-16s are being flown by 26 countries.
Prime Minister Narendra Modi's government's emphasis on local manufacturing will help build a domestic industrial base and cut outright imports.
The announcement comes days before Modi travels to Washington for a first meeting with Trump, scheduled for June 26.
India and the United States have built a close defence relationship in recent years. Washington has emerged as among the top three arms suppliers to India, along with Russia and Israel.
Tata is already building airframe components for the C-130 military transport aircraft.
Lockheed Martin will shift its plant in Texas to fulfil the PM Modi-led government's condition that foreign suppliers would have to make planes in India with a local partner