The Armenia – Tejas Setback and India’s Export Credibility Crisis

Armenia has paused negotiations to purchase India’s Tejas fighter jets following the fatal Dubai Airshow 2025 crash a devastating blow to India’s first potential export customer. This $1.2 billion setback exposes deeper structural problems: over 60% foreign component dependency creating export control vulnerabilities, lack of combat proven credentials, and inadequate after-sales infrastructure. Meanwhile, Pakistan’s JF-17 Thunder has secured $5 billion in exports with 40 aircraft sold to Azerbaijan alone, demonstrating battle-tested reliability and supply chain independence. The Armenia suspension follows Argentina’s 2024 cancellation due to British component restrictions, revealing a pattern of failed export attempts. This critical analysis examines how the Tejas program’s protracted development, foreign subsystem reliance, and marketing-reality gaps undermine India’s defense export credibility—and whether systemic reforms can salvage the platform’s international prospects before competitors cement their regional dominance.

Armenia has suspended negotiations to purchase India’s Tejas light combat aircraft following the fatal crash at the Dubai Airshow on November 21, 2025 (DefenseHereDefence Security Asia), which killed Wing Commander Namansh Syal instantly (The Logical Indian). This represents far more than a commercial disappointment it exposes fundamental vulnerabilities in India’s defense export strategy and raises serious questions about the Tejas program’s readiness for international markets.

1. The Immediate Impact: Beyond Commercial Loss

Strategic Dimensions

The deal involved approximately 12 Tejas aircraft valued at roughly $1.2 billion (DefenseHere), positioning Armenia as India’s most promising first export customer. The suspension carries several layers of significance:

First Mover Disadvantage: Without a single confirmed export, the Tejas lacks the validation that comes from operational deployment in foreign air forces. Every potential buyer now represents a high stakes gamble on being the program’s guinea pig.

Optics Over Substance: The aircraft entered an unrecoverable nose down attitude during a low altitude maneuver estimated below 500 feet, impacting the ground with immense force (Defence Security Asia). The globally disseminated crash footage creates a perception problem that transcends technical causation. Even if investigations reveal pilot error or other non-systemic factors, the brand damage is immediate and visceral.

Diplomatic Complexity: Armenia is also reportedly advancing negotiations for an Indian upgraded Su-30MKI package valued at $3 billion for 8-12 units (Defence Security Asia), suggesting Armenia may be pivoting toward heavy fighters rather than light combat aircraft potentially reflecting deeper doubts about the Tejas platform.

Financial and Industrial Ramifications

Israel Aerospace Industries (IAI), which supplied advanced radar systems and other equipment integrated into the Tejas jets, is facing losses amounting to tens of millions of dollars (Pakistan Observer) due to the suspension. This highlights how the setback reverberates through India’s defense industrial ecosystem and international partnerships.

2. Historical Context: A Pattern of Failed Export Attempts

The Argentina Saga

The Tejas program’s export challenges predate the Dubai crash. In July 2023, Argentine newspaper La Nacion reported that Tejas had been eliminated from consideration, with remaining options being second hand Danish F-16 fighters or Chinese Pakistani JF-17s. Argentina ultimately agreed to purchase 24 Danish F-16s in March 2024.

The Argentine case reveals systemic obstacles:

British Component Embargo: The Tejas utilizes the British Martin Baker MK16 IN16 GS ejection seat, along with other British origin components including an aerial refueling probe and a quartz radome supplied by Cobham Limited. The UK has barred any sale of military equipment consisting of British manufactured parts to Argentina since the 1982 Falklands War.

Customization Burden: HAL offered a customised variant that replaces around 50 specific components and substitutes all major British origin components with diplomatically suitable non British alternatives. However, concerns arose that the time and money required to modify the Tejas to remove non British parts was beyond what Buenos Aires was willing to spend.

Decision Fatigue: Argentine president Alberto Fernandez ultimately stated the country would not purchase any military aircraft for the time being (AeroTime), citing resource allocation priorities.

If Armenia’s suspension proves accurate, it would represent the second major Tejas export setback in recent years, following reports of Argentina’s cancellation of a Tejas evaluation in late 2025 over performance and supply chain concerns (Defence Security Asia).

Other Market Attempts

India has actively pursued multiple markets without success:

• Malaysia: Competed in an 18 aircraft tender but faced strong competition from seven other platforms
• Australia: HAL offered the Tejas in its “Lead in Fighter Trainer” (LIFT) configuration to Australia’s Department of Defence in July 2020, competing against Boeing Saab T-7 Red Hawk and others—with no confirmed outcome
• UAE: Despite the Tejas performing impressive aerial maneuvers at the November 2021 Dubai Air Show, the UAE announced in February it was buying L-15 training and combat aircraft from China (EURASIAN TIMES)

3. Fundamental Structural Weaknesses

The “Indigenous” Paradox

The Tejas faces a credibility problem: it’s marketed as indigenous but heavily dependent on foreign subsystems. The document highlights critical dependencies:

Mk1A Variant Components:

• AESA radar: Israeli IAI-Elta
• Electronic warfare system: Israeli suppliers
• Helmet-mounted display: Elbit
• Derby air to air missiles: Rafael
• Engine: American-made GE F404-GE-IN20 (Bakunetwork)
• Navigation systems: French
• Landing gear: British

Over 60 percent of Tejas components are sourced from abroad (Bakunetwork) creating what one analysis describes as “layers of licensing and political friction baked into the supply chain.”

Export Control Vulnerability

This dependency creates three problems:

1. Re export Restrictions: Every foreign component requires approval from its country of origin for third-party sales
2. Supply Chain Uncertainty: Buyers worry about access to spare parts during potential diplomatic tensions
3. Political Leverage: Suppliers can block deals (as Britain did with Argentina), giving foreign powers veto authority over India’s export ambitions

India’s HAL Tejas uses American engines, Israeli radar, and a combination of avionics from different nations, which means exporting Tejas jets will need a lot of approvals (EURASIAN TIMES). In contrast, JF-17 uses mostly Chinese and Russian technology all of which are cleared for re export to 3rd countries (EURASIAN TIMES).

Development Timeline and Maturity Concerns

The Tejas has faced concerns over its protracted development history, maturing operational envelope, and lingering technical uncertainties (Defence Security Asia). The crash marked the Tejas programme’s first fatal accident and its second recorded incident since a non-fatal 2021 ejection (Defence Security Asia)

The long development cycle (dating back to the 1980s) with shifting configurations undermines buyer confidence in platform stability and industrial capacity to deliver on schedule.

4. The Competitive Landscape: JF-17’s Ascendancy

A Stark Contrast

While India struggles to secure its first Tejas export, Pakistan’s JF-17 Thunder has achieved remarkable success:

Export Record:

• Pakistan announced on June 6, 2025, a $4.6 billion defense agreement with Azerbaijan for the sale of 40 JF-17 Thunder fighter jets.
• Export users include Myanmar, Nigeria, and Azerbaijan (Army Recognition)
• JF-17 exports have generated more than $5 billion in revenue (Defence Security Asia)
• Several nations including Argentina, Iraq, Malaysia, and multiple African air forces are continuing negotiations or conducting technical evaluations for Block III (Defence Security Asia)

Battle-Proven Credentials: In 2019, during the Kashmir flare up, JF-17s played a front-line role in Pakistan’s “Operation Swift Retort,” reportedly downing an Indian MiG-21 Bison (Bakunetwork). This combat record provides tangible proof of capability that Tejas lacks.

Cost-Effectiveness: At an estimated $25 – 30 million per unit, the JF-17C remains one of the most cost-efficient 4.5 generation fighters available on the global market, compared to a single Rafale F4 costing upwards of $115 million and the F-16V exceeding $70 million (Defence Security Asia).

Supply Chain Independence: The aircraft’s non dependence on Western components protects buyers from U.S. or European sanctions, making the JF-17 attractive to nations navigating diplomatic constraints or seeking autonomy in defence procurement.

Strategic Implications for Armenia

The Azerbaijan-JF-17 deal creates direct pressure on Armenia. As one of the largest defence partners of Armenia since 2021, India would closely observe the changing dynamics of the South Caucasus, as Pakistan’s sale of JF-17 aircraft to Azerbaijan may lead Armenia to further arms imports from its partners, including India (Indian Council of World Affairs).

However, the Tejas suspension suggests Armenia may be reconsidering whether light fighters adequately address its security challenges against an adversary now equipped with advanced JF-17 Block IIIs.

5. Systemic Issues in India’s Defense Export Strategy

Overreliance on Political Relationships

India appears to assume diplomatic ties translate automatically into defense sales. The document notes Armenia had engaged in defense collaborations involving artillery systems, drones, and ammunition yet this relationship foundation proved insufficient when technical and reliability concerns emerged.

Inadequate After-Sales Ecosystem

Buyers evaluate total lifecycle costs and support infrastructure. The Tejas program faces concerns about:

• Delivery timelines
• Maintenance support infrastructure
• Spare parts ecosystem reliability
• After-sales service maturity

These are areas where established exporters (including Pakistan with JF-17) have built comprehensive packages.

Communication and Transparency Failures

The document notes “unusual silence” from both India and Armenia regarding the suspension. This ambiguity fuels speculation and suggests neither party has a clear strategy for addressing the situation. Transparent accident investigations and proactive communication with partners are essential for maintaining credibility.

Marketing vs. Reality Gap

India has aggressively marketed the Tejas in Southeast Asia, South Asia, Africa, and Latin America, often highlighting the aircraft’s competitive unit cost of $40-50 million (Defence Security Asia)yet price alone hasn’t closed deals. Buyers require demonstrated operational maturity, not just competitive pricing.

6. Geopolitical and Regional Security Dimensions

Armenia’s Strategic Calculus

Armenia faces existential security pressures. The country cannot afford uncertainty regarding frontline aircraft reliability when facing an adversary equipped with:

• Advanced Turkish systems (particularly drones, which proved decisive in the 2020 Nagorno Karabakh conflict)
• Israeli weapons
• Now, Pakistani JF-17s with Chinese backing

Armenia’s reported interest in heavy Su-30MKIs over light Tejas fighters suggests a reassessment toward platforms with proven track records and greater payload/range capabilities.

The Broader South Caucasus Context

Azerbaijan’s decision to procure the JF-17 Thunder comes as part of a comprehensive effort to modernize its air force following operational lessons from the 2020 Nagorno Karabakh conflict (Army Recognition). The purchase signals a deliberate shift away from traditional reliance on Russian-made aircraft (Army Recognition).

This creates a regional arms dynamic where:

• Azerbaijan strengthens ties with Pakistan, Turkey, and China
• Armenia seeks alternatives to Russian dependence (following Russia’s failure to support it effectively in recent conflicts)
• India positions itself as a potential alternative supplier—but must deliver credible platforms

Competition with Regional Powers

The Tejas competes in a crowded market:

• Pakistan-China JF-17 Block III: $25-30 million, combat-proven, minimal export restrictions
• South Korea FA-50: Established track record, Western systems integration
• Sweden Gripen C/D: Premium Western option with mature support ecosystem
• Second-hand F-16s: Battle-tested, extensive global logistics network

In this landscape, global buyers are reportedly wary of the Tejas’s protracted development history, maturing operational envelope, and lingering technical uncertainties (Defence Security Asia).

7. The Path Forward: Strategic Imperatives

Immediate Actions

1. Transparent Investigation: Rapidly complete and publicly share crash investigation findings. Demonstrate that systemic issues (if any) are being addressed comprehensively.

2. Diplomatic Re-engagement: While respecting Armenia’s evaluation process, maintain open channels. Offer enhanced guarantees, extended warranties, or phased delivery terms to mitigate perceived risks.

3. Israeli Partner Coordination: IAI faces significant losses from this suspension (Pakistan Observer). Joint India- Israel efforts to reassure Armenia about technology reliability could help salvage the deal.

Medium-Term Reforms

1. Component Indigenization Acceleration: Prioritize replacing foreign components (especially those subject to third-party export controls) with indigenous alternatives. The British component issue with Argentina demonstrates how foreign dependencies can kill deals.

2. After-Sales Infrastructure Investment: Establish regional maintenance hubs, spare parts stockpiles, and training facilities. Package these as part of comprehensive support agreements.

3. Production Capacity Expansion: Address delivery timeline concerns by demonstrating ability to scale production reliably. Current production rates raise questions about meeting international commitments alongside domestic requirements.

4. Combat Deployment Opportunities: The lack of combat-proven status is a significant disadvantage. Consider operational deployments in appropriate scenarios to build credibility.

Long-Term Strategic Shifts

1. Realistic Market Positioning: Stop marketing Tejas as directly competing with established platforms like F-16 or Gripen. Instead, position it for specific niches:

• Countries with limited budgets seeking basic air sovereignty capabilities
• Nations wanting to diversify away from Russian dependence without full Western alignment
• Partners willing to accept developmental partnerships rather than turnkey solutions

2. Technology Transfer and Co-Production: Rather than pure export sales, offer co-production arrangements. This addresses:

• Delivery timeline concerns (local assembly capacity)
• Technology transfer aspirations of developing nations
• After-sales support (local maintenance capabilities)

3. Package Deals: Bundle Tejas with proven Indian defense exports (artillery, radars, drones) to leverage India’s successful export track record in other domains.

4. Honest Assessment of Readiness: If the platform genuinely isn’t export-ready, acknowledge this internally and delay aggressive marketing until maturity benchmarks are achieved. Premature export pushes that fail damage long-term credibility more than short-term delays.

8. Broader Implications for India’s Defense Industry

Indigenous Development Philosophy

The Tejas experience highlights tensions in India’s “Atmanirbhar Bharat” (self reliant India) defense vision:

• Rhetoric vs. Reality: Platforms marketed as “indigenous” but heavily dependent on foreign systems undermine credibility
• Import Substitution vs. Export Competitiveness: Designing for domestic requirements (Indian Air Force specifications) may not produce globally competitive export products
• Time to Market: Lengthy development cycles suited to domestic monopoly markets fail in competitive international environments

Learning from Competitors

Pakistan’s JF-17 success offers instructive lessons:

1. Partnership Model: Jointly developed by Pakistan Aeronautical Complex and China’s Chengdu Aircraft Corporation, leveraging Chinese industrial capacity and technological base while allowing Pakistani assembly and customization.

2. Rapid Iteration: Developed in the late ’90s with maiden flight in 2003, first production units flying by 2007, and over 160 built as of 2025 (Bakunetwork) demonstrating faster development cycles than Tejas.

3. Export Oriented Design: From inception, designed for export markets with pricing, supply chain, and support considerations built in.

4. Comprehensive Packages: Pakistan’s ability to offer fighter, weapons, training, and lifecycle support as a bundled package ensures sustained competitiveness (Defence Security Asia).

Reputational Stakes

This setback matters beyond the Armenia deal because:

1. Network Effects: Defense exports rely heavily on reputation. One successful deployment creates demonstration effects; repeated failures create negative momentum.

2. Domestic Confidence: The Indian government placed an order worth approximately $5.8 billion in 2021 for 83 Mk-1A fighters (Defence Security Asia), reflecting urgent domestic needs. Export failures raise questions about platform quality even for domestic use.

3. Strategic Autonomy Goals: India’s aspiration to be a major defense exporter (not just importer) is central to its rising power ambitions. Repeated export setbacks undermine this strategic positioning.

Conclusion: A Crossroads Moment

The Armenia-Tejas suspension represents more than a commercial setback it’s a referendum on India’s defense industrial maturity and export credibility. Several uncomfortable truths emerge:

1. Platform Immaturity: Despite decades of development, the Tejas may not be genuinely export ready. The Dubai crash, whether due to pilot error or technical issues, exposed this reality at the worst possible moment.

2. Systemic Competitiveness Issues: Price competitiveness alone doesn’t win sales. The JF-17’s success demonstrates that battle-proven performance, supply chain independence, comprehensive support packages, and rapid production capacity matter more.

3. Export Control Vulnerabilities: Heavy reliance on foreign components (especially those subject to third-party veto powers) fundamentally undermines export viability. True indigenization not just assembly is essential.

4. Diplomatic Limitations: Strong bilateral relationships don’t automatically translate into defense sales when technical and reliability concerns exist. Armenia’s suspension despite growing India Armenia defense cooperation proves this point.

5. Institutional Gaps: India lacks the mature defense export ecosystem (transparent investigations, proactive communication, comprehensive after-sales networks) that established exporters possess.

The document’s conclusion is apt: “The Tejas remains a significant achievement for Indian aerospace engineering, but the global market is unforgiving. Perception shapes reality, and the reported freeze marks a critical moment for India to reassess how it presents and supports its flagship fighter internationally.”

However, this assessment may be too gentle. The reality is harsher: without fundamental reforms accelerated indigenization, production capacity expansion, transparent quality assurance, and realistic market positioning the Tejas risks becoming a cautionary tale of indigenous development ambitions undermined by execution failures.

India faces a choice: engage in genuine introspection and systemic reform, or persist with current approaches and watch competitors like the JF-17 dominate markets India aspires to enter. The Armenia setback should serve as the wake-up call that forces the former path. Whether India’s defense establishment can overcome institutional inertia and pride to embrace necessary changes will determine if Tejas ever achieves export success or remains perpetually “one deal away” from breakthrough that never materializes.