Jakarta drops South Korean jet production, eyes Dassault Rafale order
Indonesia's cancellation of a fighter jet co-production deal with South Korea clears the way for a major follow-on order for France's Dassault.
Indonesia has formally abandoned plans to domestically manufacture South Korea’s KF-21 Boramae fighter jet, settling instead for the transfer of a single prototype. Defense Logistics Agency head Yusuf Jauhan confirmed in late June that the 2015 co-production agreement with Seoul will not materialize.
Jakarta originally committed to covering 20 percent of the 1.6 trillion won ($1.3 billion) development cost. In return, state-owned PT Dirgantara Indonesia (PTDI) was to receive technology transfers to build 48 KF-21 Block-I units locally. The arrangement ultimately collapsed under the weight of delayed Indonesian payments and allegations of sensitive data theft.
When Jakarta requested to push its payment deadline from 2026 to 2034, Seoul rejected the extension to avoid derailing its own deployment timeline. The nations subsequently downsized the agreement. Indonesia paid a reduced 600 million won to simply receive one single-seat prototype, stripping away the broader manufacturing ambitions.
For European defense contractors, the unraveling of this Asian manufacturing partnership removes a significant competitor from a lucrative procurement cycle. The failure of Seoul's complex technology-sharing model demonstrates the risks of emerging-market joint ventures. It leaves established Western manufacturers with a clearer path to secure large-scale orders.
Indonesian officials are now directly weighing the purchase of 24 additional French Dassault Rafale jets. Such an order would supplement the 42 Rafales Jakarta ordered in 2022, further cementing Dassault's dominance in Southeast Asian aerospace procurement.
“Indonesia may still want the aircraft, but not necessarily the burdens of local co-production. From Seoul’s perspective, this is probably easier to manage and potentially more attractive for the KF-21’s broader export campaign,” said Ju Hyung Kim, president of the Security Management Institute think tank.
While the Rafale remains a strong candidate, Jakarta is also diversifying its fleet. In April, the government signed a $10 billion overseas loan scheme to purchase 48 KAAN stealth jets from Turkish Aerospace Industries, with deliveries scheduled to begin in 2032. PTDI maintained that internal discussions are ongoing and no definitive procurement plan has been established.
