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India's Call for Arms
Lockheed and India Partner Up on F-16 Deal

Top defense firms in India and the U.S. just stepped up their cooperation in a big way. Reuters: is reporting that a new F-16 deal is in the works for the Indian Air Force:

Lockheed Martin (LMT.N) signed an agreement with India’s Tata Advanced Systems on Monday to produce F-16 fighter planes in India, pressing ahead with a plan to shift its Fort Worth, Texas plant to win billions of dollars worth of order from the Indian military. […]

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 U.S., 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. […]

India will also have the chance to export the F-16 that is flown by air forces around the world, the joint statement said. Some 3,200 of these planes are being flown by 26 countries and the model that is being offered to India will be Block 70, the most modern of all the F-16s.

The signing of the F-16 deal is well-timed ahead of Indian Prime Minister Narendra Modi’s visit to Washington next week, a tangible agreement that both sides can tout as a sign of deepened defense cooperation. Of course, there is some obvious tension here—Modi has touted the F-16 deal as part of his “Made in India” initiative, while President Trump has famously railed against American companies that outsource jobs and production overseas. But Tata and Lockheed seem to have already anticipated Trump’s objections, playing to the President’s sensibilities by stressing that the deal will still support American jobs despite the manufacturing shift.

In any case, the F-16 deal is a win-win for New Delhi. India is in desperate need of new jets, ships, and weapons to replace its Soviet-era stock, and it has been buying from all comers (including Israel, France, and Russia) as it seeks to arm up for the new millennium. This deal will help further upgrade India’s arsenal, while promoting Modi’s goal of increasing domestic production within India.

The F-16 deal could also give India some leverage over its arch-rival Pakistan. Under the terms of the agreement, India now has partial control over the export of F-16s to other countries. One of the biggest buyers of those jets is Pakistan, which has lately been stymied in its efforts to secure subsidized F-16s from the United States. With the U.S. refusing to sell Islamabad the jets at bargain prices and key supply chains now running through India, Pakistan may now need to look elsewhere to upgrade its air force.

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