Indo Defence 2025: Indonesia signs agreement to acquire Kaan fighter aircraft

Indonesia has signed an agreement with Turkish Aerospace (TUSAŞ) to procure 48 Kaan National Combat Aircraft (MMU) for an estimated USD10 billion, with deliveries expected within 120 months. The agreement, signed at the 2025 Indo Defence Expo, includes a significant transfer of technologies and aims to leverage Indonesia's industrial infrastructure. The Indonesia-bound aircraft will be powered by the domestically developed TF35000 engine, with development slated for completion by 2032.

Analysis

Turkish Aerospace (TUSAŞ) has secured a significant agreement with Indonesia for the procurement of 48 Kaan National Combat Aircraft (MMU), valued at an estimated USD10 billion, with deliveries slated within 120 months. This deal, announced as signed on June 11th at the 2025 Indo Defence Expo and Forum in Jakarta, extends beyond a simple aircraft sale, incorporating a 'significant' transfer of technologies and plans to leverage Indonesia's industrial infrastructure and production capacities for the Kaan MMU programme. The commitment to power these aircraft with the domestically developed TF35000 engine by TUSAŞ Engine Industries (TEI), targeted for completion by 2032, underscores Türkiye's strategic push for self-sufficiency in critical defense technologies and its growing prominence as an exporter of advanced military hardware. The reported 'strongly positive' sentiment (0.8 sentiment score) and notable market impact score (0.7) reflect the deal's perceived importance for Türkiye's defense sector revenue and technological validation, as well as for Indonesia's air force modernization and industrial development capabilities.

Key Decisions for Investors

• Evaluate potential ripple effects on publicly traded companies within the Turkish defense supply chain and related aerospace component manufacturers that might benefit from this large-scale, long-term Kaan MMU program, as TUSAŞ itself is state-owned.
• Monitor the progress of the TF35000 engine development, as its successful completion by 2032 is crucial for the Kaan program's long-term viability, Türkiye's technological independence, and the overall execution of this USD10 billion agreement, potentially impacting future export potential.
• Assess the geopolitical implications of this Türkiye-Indonesia defense partnership, including its impact on regional military balances, the strengthening of bilateral ties, and the potential for further technology transfer-inclusive defense deals by Türkiye with other nations, which could alter the competitive landscape for established global defense contractors.