Boeing will partner with Indian defence contractors in setting up a F/A-18 fighter jet production facility

A strong ‘Make in India’ theme will be behind US aircraft maker Boeing’s pitch for the Indian Air Force’s order for 110 fighter jets. The order, worth around Rs 800 billion, seeks commitment from vendors to supply sensitive technologies as well to carry out a bulk of manufacturing in India.

Getting new aircraft is crucial for PMNarendra Modi as the South Asian nation faces increased risks from neighbouring Pakistan and China at a time when the Russian MiG fighters -- India’s mainstay -- are being phased out. According to the government, the country’s air force and navy require as many as 400 single- and twin-engine combat aircraft. The first aircraft must be delivered within three years of signing the contract. PM Modi plans to modernise the country’s ageing military equipment with a $250 billion spending, but it has been bogged down by a defence procurement process which is known for delays, backtracking and a history of corruption, making it a sensitive, slow-going process.

Boeing will partner with India’s state-run Hindustan Aeronautics (HAL) and Mahindra Defence Systems for its bid to sell 110 fighter aircraft to the Indian Air Force (IAF), the company said in a statement on April 12. The new facility Boeing says could also be used to support other Indian defence projects such as the Advanced Medium Combat Aircraft (AMCA).

“The RFI (request for information) is much contemporary this time. It broadens the scope and competition. It focuses on the IAF’s real war-fighting capabilities. Our joint venture is an optimum mix of capability, cost and industrialisation,” said Pratyush Kumar, president, Boeing India.

Boeing and its local partners are ready to set up an “entirely new and state-of-the-art production facility,” which would provide the “infrastructure, personnel training, operational tools and techniques” necessary to support the local production of its F/A-18E/F Super Hornet fighter aircraft, according to the press release.," Kumar added.

Several foreign manufacturers have objected to ToT without a majority stake in a partnership. Under the current strategic partnership model, it is mandatory for an Indian firm to have at least a 51 per cent stake. Kumar said that having a public sector player as partner made their case of indigenisation stronger. “With a public-private partnership approach, I am bringing the best of public sector and private sector — the only two companies in India which have manufactured airplanes,” he said.

Pratyush Kumar said the US government’s willingness to liberalise rules on transfer of technology (ToT) gave them a leg-up against competitors. “I don’t think ToT is an issue. It is not us but the US government is saying that rules will be more forward-looking. The US now recognises India as its ‘major defence partner’ and they are much more forward-leaning and sharing technology with India,” he said.

The IAF issued a long-awaited request for information (RFI) to global vendors for the procurement of 110 fighter aircraft on April 6. The tender is open for single-engine and twin-engine fighter aircraft. (The new RFI replaces an October 2016 RFI for a new single-engine fighter aircraft.) As I explained earlier this week:

According to the RFI, the IAF is seeking to procure 82-83 (75 percent) single-seat fighter jets and 27-28 twin-seat variants (25 percent). Out of the 110 aircraft, 16-17 (15 percent) are to be bought in fly-away condition, whereas the rest are to be built in India under the framework of the Indian Ministry of Defense (MoD) Defense Procurement Procedure 2016 to facilitate the manufacturing of military hardware locally.

Boeing was outbid in 2011 under the $20 billion MMRCA (medium multi-role combat aircraft) project by French aircraft maker Dassault Aviation and its Rafale fighter jet. However, the MMRCA project was cancelled in July 2015 and the IAF decided to procure 36 off-the-shelf Dassault Rafale fighter jets instead in September 2016.

Boeing’s probable rivals in the process, Dassault, SAAB and Lockheed, have chosen private players Reliance, Adani and the TATA as their respective partners. “The only company which has achieved something in aircraft manufacturing is a public company. The industry I believe cannot suddenly ignore them and go for other, that’s not wise. We brought our industrial partners and spoke to almost 400 companies in the sector. We realised ignoring HAL is a bad idea,” Kumar said.

In addition to the April 2018 tender for 110 land-based fighter jets, Boeing is also interested in pitching its carrier capable F/A-18 Super Hornet fighter jet to the Indian Navy (IN). The IN intends to procure 57 new carrier-based multi-role fighters for its new Vikrant-class aircraft carriers.

The Eurofighter consortium and Russia’s United Aircraft Corporation are also expected to participate in the competitive bidding process.

Our Bureau