SOURCE: RAUNAK KUNDE / NEWS BEAT / IDRW.ORG
The Indian Air Force’s (IAF) long-awaited Medium Role Fighter Aircraft (MRFA) tender, aimed at acquiring 114 advanced fighter jets, is facing an additional challenge as local production costs are projected to exceed direct procurement prices by $20-30 million per jet. According to an IAF official who spoke to idrw.org, manufacturing these jets locally—an integral part of the Make in India initiative—would incur significantly higher expenses compared to acquiring them directly from the original equipment manufacturers (OEMs).
The MRFA tender includes four twin-engine fighters in consideration: the Boeing F/A-18E/F Super Hornet Block III, the Eurofighter Typhoon, the Russian MiG-35, and the Dassault Rafale. Additionally, two single-engine options, the Lockheed Martin F-16 Block V (marketed as the F-21) and Saab’s Gripen-E, have also been proposed. While all six fighters present advanced capabilities, the increased costs associated with establishing local production lines, building specialized infrastructure, and training a domestic workforce will push the final price per unit well above what a direct OEM purchase would entail.
One of the main cost drivers is the need for an expansive investment in infrastructure. Whichever jet is chosen, the IAF will have to establish a dedicated assembly line in India, including extensive facilities for component manufacturing, assembly, testing, and maintenance.
Additionally, the local supply chain would need to be set up, with specialized equipment and machinery imported from the OEM. This complex manufacturing environment requires considerable upfront investment, which would be reflected in the unit cost of each aircraft.
The foreign OEM will also need to invest heavily in training local personnel for advanced manufacturing processes. Fighter jet production involves strict standards and high precision, which necessitates a highly skilled workforce. While the IAF’s partner in the project—likely a private or state-owned Indian company—may already have a capable workforce, manufacturing fighter jets at this scale and complexity will demand further training and possibly certification from the OEM, adding both time and expense to the process.
Another consideration is that the manufacturing process itself will not yield immediate savings. The IAF will face a steep initial investment cost and a slow ramp-up period as Indian facilities, engineers, and technicians get up to speed on the new processes and technologies. The first few aircraft of the line could carry particularly high production costs as the new facilities refine their workflows and adapt to producing such complex machinery. Thus, the IAF will not see cost benefits from local production until the later stages of the program.
Moreover, the IAF official pointed out that local manufacturing could make the jets more expensive than direct OEM procurement due to the added costs of transferring sensitive technology and intellectual property rights. Each MRFA contender would have to share key technologies for the IAF to maintain and operate these jets domestically, and technology transfer agreements can often carry premium pricing.
Given these factors, the MRFA program, which the IAF initially envisioned as a transformative project for India’s aerospace industry, is now facing questions over whether the increased cost of local production is justifiable. While the Make in India vision prioritizes bolstering domestic manufacturing and reducing dependence on foreign suppliers, the high costs associated with domestic assembly might prompt the IAF and the Ministry of Defence to reassess their strategy.
Despite these obstacles, the IAF remains committed to the MRFA program, seeing it as vital for maintaining India’s aerial combat capabilities and addressing depleting fighter squadron numbers. While local production costs may be higher, the program would help develop a robust defence manufacturing ecosystem in India, potentially reducing costs in future projects as domestic expertise grows.
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