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Could 'America First' policy upend Lockheed’s F-16 plans in India?

March 23, 2017 (Photo Credit: MANJUNATH KIRAN/AFP/Getty Images)
WASHINGTON – As the Trump administration focuses on a pro-American industrial policy, Lockheed Martin is keeping a close eye on what that might mean for plans to build F-16 fighters in India. 

For now, company officials are staying positive about the chances that they will be allowed to go through with a plan to open a production line for the F-16 in India. But they acknowledge that the change in administration may require a shift in plans.

“We’re working closely with the administration to understand what is [their] policy towards a program like the Indian fighter recapitalization program,” Orlando Carvalho, executive vice president of the company's aeronautics division, said in an interview Tuesday. 

“The indications we have heard have been positive. From the Defense Department, from the State Department, the indications are that they are supportive of what the Indian government wants to do. But we’re working with the administration to understand that,” Carvalho added. 

John Rood, Lockheed’s international senior vice president, added that the company has briefed the new administration on the potential F-16 plan, but noted that any timeline for a final decision rests with the Indian government more than the U.S. administration.


And if history is any guide, India’s decision won’t come soon. New Delhi’s hunt for a new fighter aircraft has been legendarily delayed, going back to 2007 when the government kicked off what was known as the Medium Multi Role Combat Aircraft (MMRCA) program. The MMRCA called for a roughly $12 billion spend for 126 new high-end fighters.

The F-16 was one of the airplanes considered and then discarded by the government, which in 2011 selected the Dassault Rafale. However, a deal was never consummated, and in July of 2016 the Indian government cancelled the MMRCA program outright and began a series of a government-to-government discussions. That gave new life to the American competitors, at a time when the Obama administration was prioritizing strengthened ties to India. 

In October, India officially re-launched the campaign, with consensus that the two leading candidates are the F-16 and the Saab Gripen. This time around, Lockheed believes it has a strong hand not play, in part because India has purchased Lockheed’s C-130J and in part because the company has ties with the Tata Group, India’s manufacturing giant.

But Lockheed also looked to up its chances by pledging to open a production line in India for the F-16s. It’s a step up from the usual tech-transfer offer from companies, but it also means creating jobs abroad rather than home – at a time when the rhetoric from the Trump administration is very focused on domestic growth.


Carvalho acknowledged that with the Trump administration still sorting itself out, there are questions about industrial policy that need to be clarified. But he said he was not concerned about getting guidance today from holdover Obama-era officials that could be overturned in the near future as political appointees arrive at DoD and State.

“In discussions that we’re having, there is no lack of confidence in the information and in the exchanges that we’re having with the administration,” Carvalho said. “But being a new administration that is looking across all these things and trying to arrive at what their positions are, there is an evolution here.” 

Rood added that the company has to let the administration “mature” a bit before getting a final answer, but also expressed confidence that the Trump team would continue the Obama-era ties to India.

“We’re very pleased that the Trump administration, in their initial dealings with India, have talked about continuing to build a strategic partnership between the U.S. and India,” Rood said, citing calls between Trump, Secretary of Defense Jim Mattis and their Indian counterparts. “They’ve reaffirmed that the F-16, or something like that, being part of the Indian defense force would be a major step in the direction of a strategic relationship. So we’re really encouraged that they continue to talk about that.”

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