Indonesia Halves KF-21 Investment After Signing Deal for 48 Turkish KAAN Fighters

Less than a week after finalizing a landmark deal with Türkiye for 48 KAAN stealth fighter jets, Indonesia has significantly reduced its financial commitment to South Korea’s KF-21 Boramae program, signaling a strategic shift in its defense partnerships.

The new agreement, signed during the Indo Defence exhibition, officially lowers Jakarta’s investment in the KF-21 project to $437 million—less than half of the original $1.24 billion pledged when Indonesia joined the joint development effort in 2016. The long-delayed negotiation, which spanned over a year, had faced a series of diplomatic and legal complications.

Reduced Stake, Reduced Benefits

According to South Korea’s Defense Acquisition Program Administration (DAPA), $292.2 million of Indonesia’s revised commitment has already been paid. The remaining balance is pending finalization of a new payment schedule, to be coordinated with Korea Aerospace Industries (KAI), the program’s primary developer.

Originally intended to fund 20% of the KF-21’s development, Indonesia’s lowered stake means fewer rights to key technology transfers and co-production privileges. Jakarta had previously requested a payment extension through 2034, which also altered the terms of the bilateral agreement.

Espionage Allegations Stalled Negotiations

Tensions between Jakarta and Seoul escalated in January 2023, when several Indonesian engineers working at KAI facilities were accused of attempting to steal sensitive data using USB drives. The incident triggered a full-scale South Korean investigation, leading to a diplomatic rift. Though the engineers were cleared of all charges earlier this month, the episode left a lingering strain on bilateral trust.

Türkiye’s KAAN Fighter Deal Reshapes Indonesia’s Defense Strategy

Indonesia’s decision to sign a historic agreement with Turkish Aerospace for 48 units of the next-generation KAAN stealth fighter has further reshaped its defense outlook. The KAAN deal, which includes technology transfer provisions and potential Indonesian participation in production, is seen as a clear pivot away from the KF-21 program.

The KAAN jets are scheduled for delivery within 120 months, and the deal underscores Türkiye’s growing role as a defense partner for Southeast Asian countries seeking advanced military aviation capabilities.

The developments mark a cooling of Indonesia–South Korea defense cooperation, while highlighting the expanding influence of Turkish aerospace technology in the global arms market.