Türkiye Clinches Historic $10 Billion KAAN 5th Gen Aircraft Deal with Indonesia, Redefining Global Defense Trade

In a landmark move that could reshape the global defense industry, Türkiye has sealed its largest-ever arms export deal by signing a $10 billion agreement with Indonesia for 48 KAAN fifth-generation stealth fighter jets. Finalized on June 11, 2025, during the Indo Defence 2025 exhibition in Jakarta, this contract not only marks a turning point in Türkiye’s rise as a defense exporter but also signals a major shift in Indonesia’s airpower strategy.

The KAAN, previously known as the TF-X, is Türkiye’s answer to cutting-edge fighter jets like the U.S. F-35 and China’s J-20. Designed by Turkish Aerospace Industries (TAI), the KAAN features advanced stealth design, twin engines, and powerful integrated systems including AESA radar, sensor fusion, and infrared tracking. It’s capable of flying at Mach 1.8 with a combat radius of 600 nautical miles. The fighter supports both air superiority and strike roles, with future upgrades aimed at enabling AI-assisted operations and drone teaming—key hallmarks of next-generation warfare.

The aircraft completed its first flight in February 2024 and is currently undergoing further test flights, with six prototypes in production. While early models are powered by U.S.-made F110 engines, Türkiye is working to transition to its own locally developed engines by 2030. This homegrown development is a direct response to Türkiye’s removal from the U.S. F-35 program in 2019, which spurred a renewed national effort toward military self-reliance.

Indonesia’s decision to buy the KAAN marks its most expensive defense acquisition to date, surpassing previous deals such as the $8.1 billion Rafale purchase from France and the now-canceled $1.14 billion Su-35 agreement with Russia. With this bold move, Jakarta seeks to modernize its air force while reducing its dependence on Western and Russian military suppliers. At an estimated cost of $208 million per aircraft, the KAAN offers a balance of affordability, advanced technology, and operational independence—especially when compared to the lifetime costs of over $400 million per unit for the F-35.

The geopolitical implications are just as significant. Indonesia, located at a strategic chokepoint between the South China Sea and the Indian Ocean, faces growing tensions due to China’s expanding naval influence. The stealth capabilities and sensor superiority of the KAAN will enhance Jakarta’s ability to monitor, deter, and defend its airspace in increasingly contested skies.

Additionally, the deal includes a cooperative production model. Parts of the KAAN jets will be manufactured in Indonesia, with technology sharing and domestic industrial participation woven into the contract. This supports Jakarta’s long-term ambition to build its own defense industry, reducing reliance on external suppliers and strengthening national sovereignty in defense matters.

While the $10 billion contract exceeds Indonesia’s entire 2024 defense budget, strategic offsets—such as tech transfer, local production, and long-term maintenance benefits—make the investment more sustainable. The KAAN deal also builds upon growing defense ties between Türkiye and Indonesia, following earlier agreements on drone development and missile technology co-production.

For Türkiye, this agreement is more than just an economic milestone. It places the country among the very few globally capable of developing and exporting fifth-generation fighter jets. Turkish defense exports have already seen a dramatic rise—106% growth in just four years—and the KAAN deal could further push annual revenues for TAI to over $2.4 billion by 2029. Moreover, this export breakthrough is likely to attract interest from other nations, with countries like Saudi Arabia, Azerbaijan, Qatar, and Malaysia reportedly eyeing the platform.

The pressure is now on TAI and Türkiye’s broader defense ecosystem to deliver all 48 jets within the agreed 10-year window. This will require rapid scaling of production, on-time development of local engines, and robust logistical support. But success in fulfilling this deal could position Türkiye as a credible alternative to the West and China in the global arms market—especially for nations seeking high-tech systems without political strings attached.

In essence, the Türkiye-Indonesia KAAN deal is not just a commercial transaction—it is a strategic statement. It highlights Türkiye’s emergence as a major defense player and Indonesia’s evolution from a buyer of systems to a partner in development. As new alliances form and old paradigms shift, the KAAN may well become a flagship of how defense cooperation is reimagined in a multipolar world.