The Paris Air Show saw a far-reaching deal take place. The American manufacturer Lockheed Martin on Monday announced that it would be making its classic F-16 fighter-interceptor in India. The offer is contingent to the Indian government contracting to buy the fighter jet for the Indian Air Force (IAF).

In case thus is agreed to, the American firm will build the jets in India in partnership with India's top industrial house, the Tatas. This announcement was made on the last day of the Air Show. Al Jazeera News Channel reports the news.

Indian need

The Indian fighter market is very lucrative with the IAF requiring at least 150 warplanes to replace its aging MIG fleet.

The deal could be worth $12 billion. The MIG 21 the first of the Russian aircraft entered service nearly 57 years back. Most of the planes are obsolete, and the IAF squadron strength is down to 32 from 45.

There is stiff competition to make the planes in India as per the Modi government policy of "make in India" from Russia and Sweden. The Russians have offered the MIG 35 and the Swedish company Saab, the Gripen.

Lockheed is confident of bagging the contract as it will shift its entire production line to India. The plane made in India will also be exported as India will become the central hub for the manufacture of the fighter.

Lockheed and Tata have confirmed to CNNMoney that F-16 production in India can go ahead only if the government of India agreed to buy the fighters for the IAF.

Politics

The manufacture of the plane in India will also be in line with the Modi government's policy of "Make in India." Lockheed has chosen Tata as it's partner as both companies jointly already make parts for the C130 and Sikorsky S62 helicopter.

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Modi is due to visit the USA for a meeting with Trump on June 26. This deal could be discussed at that time. Lockheed has confirmed the deal would not be against Trumps of policy "Buy American, Hire American." The company has said that manufacturing the plane in India will support thousands of F16 supplier jobs in the US.

Last word

Lockheed has offered their most advanced fighter to India. It is however not to India's liking that the F16 has also been supplied to Pakistan. The F-16 is the world's most famous fighter jet, and the American company has manufactured 3200 of these planes which are operated by 26 countries around the globe. The success of the deal will depend on how the Modi -Trump meeting goes on 26 June. An icy meeting could well see the end of the deal.