Indian state owned defence manufacturer, Hindustan Aeronautics Limited (HAL) has formed a panel to enter into a pact with the US’ defence giant, General Electric, for the purchase of GE-F414 engines to power its in-house LCA Mk2. The committee is working overtime to finalize a deal as quickly as possible, with the target set before March 2025.
Negotiations are already on, and high-level visits between India and the US have taken place to speed up the process. HAL is planning to equip the LCA Mk2 with the GE-F414-INS6 engines, and the deal is expected to be signed in the coming months.
In June 2023, HAL and General Electric (GE) signed a Memorandum of Understanding (MoU) with respect to the production of the GE-F414-INS6 engines in India. The MoU between the two parties was towards the development of Purchase and Business Agreements for the production of the engine. 80% of the parts in the engine were agreed to be locally manufactured through the transfer of technology (TOT), an increase of 22% from the agreement reached in 2012. The estimated value of the deal is about one billion USD, though this figure is still under negotiation.
In September 2024, all parties in the case – the Indian Defence Ministry and GE – signed the MLA and a DSP-83 certificate. It is pertinent to note that Manufacturing License Agreement (MLA) and DSP-83 (Non-Transfer and Use Certificate) are the mandatory requirements in order to achieve the Transfer of Technology. On the 3rd of December 2024, HAL’s Contract Negotiation Committee started talks with GE with discussion on the appraisal of the technology transfer depth.
The negotiations also cover other important issues such as technical documentation, training, delivery schedules, price escalation, and warranties. Even as the deal is being finalized, defense sources say it is too early to predict major cost escalations in acquiring the GE-F414 engines.
