US-India Business Council reluctant to transfer technology.

A recent letter by a U.S. business body to the Defence Ministry expressing its reluctance to transfer proprietary technologies could complicate India’s efforts to build a fighter jet locally with technology transfer from abroad. Both the competing aircraft have significant U.S. components.

This is a test for the ambitious new Strategic Partnership (SP) model for promoting domestic defence manufacturing under which multi-billion dollar deals are about to be initiated.

The letter was written early last month by the US-India Business Council (USIBC) to then Defence Minister Arun Jaitley in which the companies raised the issue of having control over proprietary technologies.

“Without real technology transfer, the whole idea of SP will fall apart. We will once again be doing assembling as has been happening for the last four decades,” one industry official said.

In the next couple of months, the Air Force is expected to initiate the process to select a single engine fighter jet under the SP model which will be built in India with significant technology transfer. The deal for over a 100 jets is estimated to cost over ₹60,000 crore by present projection, but the final order could end up at around 200 jets.

Twin contenders

The contenders in the race are Lockheed Martin with its F-16 and Sweden’s SAAB with its Gripen. While the F-16 is a U.S. military platform, the Gripen is powered by engines built by General Electric of the US. In addition, the same engines have been selected to power the indigenously developed Tejas Light Combat Aircraft, 123 of which have been already ordered by the IAF.

While SAAB has assured full transfer of technology, it would still require U.S. government clearance for transferring specific components.