Technology transfer is mandatory in any arms procurement under Defense Industry Law No. 12/2021 as part of the country’s effort to enhance its home-grown defense industry. Indonesia has so far relied on imports to meet its Minimum Essential Force, a long-term military modernization road map that will conclude next year.

“For Indonesia, the most important thing in this procurement process is the commitment to after-sales service and technology transfer," Herindra said in a statement after visiting the Thales UK factory in Belfast, Northern Ireland, on Feb. 27.  

Managing director of Thales UK, Philip McBride, received Herindra during the factory visit. 

According to Herindra, the French company said it agreed to the terms requested by Indonesia, which also include maintenance, training and upgrade of the products.

Herindra said he emphasized on the technology transfer with a hope to woo the French company to invest more in Indonesia under a partnership scheme with the country’s strategic state-owned enterprises (SOEs) grouped under newly established holding Indonesia Defense Industry (Defend ID).

The SOEs include arms producer PT Pindad, ship builder PT PAL Indonesia, aircraft maker PT Dirgantara Indonesia, electrotechnical company PT Len Industri and explosive producer PT Dahana.

Partnership with global players like Thales is expected to accelerate development of the national defense industry and enable it to compete in the world market, which therefore contributes to the country’s economic growth, Herindra said. 

"The national defense industry is capable of producing defense equipment and components. Some of them have been exported to several countries," said Herindra.

Thales is one of long-time partners of Indonesian defense industry players. PT Len Industri, the holding company of Defend ID, signed with Thales International SAS a deal to jointly produce 13 Ground Controlled Interception radars in May 2022, which followed the visit of Defense Minister Prabowo Subianto to France earlier that year.

The House of Representatives approved a defense budget amounting to record high Rp 134.32 trillion (US$8.75 billion) for the 2023 fiscal year, but only a small chunk has been allocated for the defense industry. The budget allocates a total of Rp 607 billion for the defense industry, defense-related research and higher education.

Since his appointment as defense minister, Prabowo has visited a number of countries, such as France, Germany, Italy, the UK and the United States to negotiate arms procurement.

Early last year, Indonesia signed a deal to buy six Rafale fi ghter jets from France in its initial purchase of a larger contract of a total 42. Jakarta is also planning to purchase F-15 heavyweight fi ghters from the US. Indonesia has been seeking to replace its aging fl eet— consisting mainly of American F-16s and Russian Sukhois.

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