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Business News/ Opinion / Why the F-16 deal isn’t a game changer

Why the F-16 deal isn’t a game changer

If realized, the F-16 deal will bring some jobs but nothing moreno market, no cutting-edge technology, and certainly no leverage against Pakistan

The downside of the deal, for India, is that by some estimates, less than 40% of the F-16 is actually Lockheed Martin technology. Photo: BloombergPremium
The downside of the deal, for India, is that by some estimates, less than 40% of the F-16 is actually Lockheed Martin technology. Photo: Bloomberg

The brouhaha over the recent deal between Tata Advanced Systems Ltd and US aircraft major Lockheed Martin for the manufacture of the F-16 fighter jet in India is really just much ado about nothing. A closer examination of the production system of the F-16, which is one of the most globalized fighters ever made, shows that even if this deal if ever realized, it would at best improve the metallurgy standards of the Tatas, but add little in terms of serious technology transfer, market penetration, or denial of strategic space to Pakistan.

The wording of the deal which was signed at the Paris Air Show is very clear—it states only the “intent to partner together to meet India’s Make-in-India requirement through the establishment of an F-16 production line in India". The most obvious takeaway from this is that the deal is not a firm agreement to manufacture the F-16 in India, but only a letter of intent to assemble the plane in India if and when the Indian Air Force (IAF) chooses that platform.

Portrayals in the commentariat (mostly through omission of the operative paragraphs of the deal) that this deal will result in the transfer of the entire F-16 production line to India, irrespective of the IAF’s choice, are plain wrong. Equally, the question is: can any manufacturer win the Indian single-engine aircraft contest without ensuring local production? The answer is a resounding no. So, is this agreement a big deal at all? Yes, but for a different set of reasons.

The F-16 is one of the most remarkable fighters of the last century. When it started out, it was a triumph of globalization—sourcing parts from across the width and breadth of the North Atlantic Treaty Organization (Nato) and other major non-Nato US allies.

The brilliance of this was that even though it started off as a US national programme, it effectively became the national fighter of a cluster of five northern European countries, of Turkey, Israel and South Korea—with each cluster heavily buying into the production and supply chains. Each of the companies buying in benefitted from the massive economies of scale in a production run of over 4,600 units as well as from being able to innovate follow-on sub-systems that were incorporated into the several upgrades that the F-16 has seen. In effect, what the F-16 did was to spawn a global production and supply chain of sub-systems manufacturers, that was highly innovative but still flexible enough to be highly adaptive and competitive.

The downside of this, for India, is that by some estimates, less than 40% of the F-16 is actually Lockheed technology. The remaining 60% is proprietary technology owned by hundreds of sub-systems manufacturers spread across the globe. This means that about 60% of the F-16 technology remains unavailable to India unless its signs deals with each of the hundreds and possibly thousands of sub-component manufacturers, some of whom are based in countries like Turkey that are less than enthusiastic about India.

The F-16 engine, for example, belongs to another US company: General Electric. Its core crystal-blade technology is off limits to even the closest US allies. Also, given the slow growth of new engines globally and considering that India’s stated aim is to become a competitor, it hardly suits GE’s business interests to transfer such technology to India.

There are other problems as well. For example, all F-16 sensors and datalinks come under the International Traffic in Arms Regulations (ITAR) which restricts the technology of US crown jewels from being given to other countries. This could be anywhere between 10-20% of the total F-16 technology, but it is this 10% that holds the key to 90% of the combat effectiveness of the F-16 platform.

Take for instance the Link-16 data system. It is a small, ugly set of boxes, but it is this which has ensured that the F-16 has been able to shoot down every Eastern Bloc (Russia and China) fighter jet it has encountered. This system increases the situational awareness of the pilot and has been key to the supremacy of Western electronics, which have decisively trumped an Eastern focus on kinetics.

In short, while the GE engine is an important component of the F-16’s combat effectiveness, the Link-16 is the real war winner, and neither are on offer to India—except for assembly purposes.

One of the most egregious compromises with the truth as far as the F-16 India saga goes is that purchasing the plane will mean India can effectively cripple the Pakistani F-16 fleet by controlling the supply of spare parts. The F-16 block 70 being sold to India is a vastly different beast from the F-16 block 50 sold to Pakistan. This means that the supplier chain India will get will be different from the supplier chain that Pakistan has access to. Indeed, the globalized supplier and manufacturer chain means that Pakistan’s tap can never be turned off.

That said, make no mistake: the F-16 is a brilliant plane. Yes, it is at the end of its life cycle but India, which isn’t as technologically advanced as the US, should be able to easily absorb whatever technology it gets from the deal. However, prospects for further external sale and secondary maintenance contracts are non-existent given that the F-16 best exemplifies an anti-monopoly product. In the end, India gets a superb fighter and a few thousand jobs but nothing more—not a monopoly, not a market, not innovation, not cutting-edge war-winning technology and, certainly, not “strategic autonomy".

Abhijit Iyer-Mitra is senior fellow at the Institute of Peace and Conflict Studies.

Comments are welcome at

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Published: 23 Jun 2017, 12:34 AM IST
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