Lockheed Martin’s ‘Make In India’ plan: A golden opportunity?

On 20th June 2017, the Maryland-based defence manufacturer Lockheed Martin announced its plans of producing the F-16 fighter jets in India. The proposal stands with a condition that India should buy 100 F-16 fighter jets from the company in order to increase its military requirements.

The contract, if granted, will pave the path for private companies around the globe for defence manufacturing in India. Currently, Lockheed Martin has struck a temporary deal with its long-time Indian partner Tata Advanced Systems Limited which builds airframe components for the C-130 Hercules jets. If successful, the manufacturing deal will let Tata control the service and upgradations of the fighter jets.

‘Make in India’ or ‘America First’?

Indian Prime Minister Narendra Modi’s ‘Make In India’ policy has been one of the biggest success stories of his tenure. Since taking office in 2014, PM Modi has been travelling across the globe to sell India as a business-friendly nation while securing huge amounts of investments in infrastructure, healthcare and technology sector. But with the arrival of new US administration, things may not remain the same.

Ever since taking office early this year, US President Donald Trump has time and again reiterated his “America First” policy which focuses on decreasing the outsourcing of jobs from multi-national companies while creating opportunities for the American people. On the other hand, India has been one of the fastest growing major economies in the last few years majorly due to the huge amount of Foreign Direct Investment coming into India from countries like the United States. Currently, numerous Multi-National Companies have their offices in India which have created millions of jobs for the Indian people. With Trump’s negative views about the outsourcing of jobs, setting up new offices in countries like India could turn out to have serious implications for American companies.

Falling into the same category, serious doubts were raised about Lockheed Martin’s proposal of manufacturing in India. Clearing the air, Marillyn Hewson, Head of Lockheed Martin Corporation, explained in a brief statement after meeting PM Modi: “The partnership with Lockheed Martin and Tata Advanced Systems to build the F-16 in India will support the advancement of Indian manufacturing expertise while also generating new manufacturing and engineering jobs in the US”.

A golden opportunity

Though most of the major economies around the world spend less money on defence imports by using indigenous products, India has to rely on countries like Russia, US, France and Israel to satisfy its military requirements due to inadequate infrastructure and technology in the defence sector.

As per the status quo, India is the biggest arms importer in the world and it desperately needs to initiate defence manufacturing on its soil to reduce its expenditure. The South Asian region has been one of the most backwards regions in terms of defence manufacturing. Unlike major economies, India and its surrounding countries focus more on fulfilling basic day to day needs of its citizens. Considering the size of the market, having a defence manufacturer like Lockheed Martin in the South Asian region would be of great market value to the company while creating numerous jobs for the Indian people. According to Lockheed Martin, the manufacturing deal will have an export potential of $15 billion in the surrounding region which will benefit both India and the United States.

Currently, the Indian Air Force is in talks with both Lockheed Martin and Sweden’s Gripen jets. Though both the Jets will be equally relevant from India’s standpoint, Lockheed Martin’s deal would boost India’s defence manufacturing sector. If the deal is accepted, it would be a win-win situation for both India and Lockheed. But if India rejects the F-16 deal, it might lose out on a golden opportunity in its quest to become a manufacturing hub.





Source:- The Economist

The post Lockheed Martin’s ‘Make In India’ plan: A golden opportunity? appeared first on Indian Defence Update.

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