GE-HAL deal to co-produce 99 jet engines to cost less than $1 billion.

The General Electric (GE) Aerospace-Hindustan Aeronautics Limited (HAL) deal for transfer of technology (ToT) to co-produce engines in India for the LCA Tejas MK-2 is expected to cost less than a billion dollars for 99 engines, top Defence Ministry officials’ calculations - ahead of formal price negotiations and clearance from the US Congress for the rare export of critical military hardware - show.

The pact will catapult India into an elite club of possible four, after the US, Russia and France. The base calculation of the cost of engine manufacturing began in 2012 when the Defence Research and Development Organisation’s (DRDO) Aeronautical Development Agency opened talks with GE for ToT of GE F414-INS6 after burning turbofan engines in the 95 kN thrust class for LCA MK-2 project, said sources. The Indian Air Force (IAF) requires LCAs to replace its aging fleet and replenish its strength.

But at that time, the US had only agreed for 58 per cent ToT. It has now been increased to 80 per cent which would take up the Indian content in the fighter aircraft to upwards of 72 per cent. Besides, accumulation of more-than-a-decade-long inflation since the initial negotiation also needs to be taken note of, sources said. A senior Ministry officer said Defence Minister Rajnath Singh’s guidance and leadership enabled the signing of these agreements with the US.

HBL