Amid Tariff Row, India Set to Seal $1 Billion Fighter Jet Engine Deal with US Firm

New Delhi, August 27, 2025 — India is preparing to finalize a $1 billion agreement with US aerospace giant General Electric (GE) for the procurement of 113 additional GE-404 engines to power the indigenous Light Combat Aircraft (LCA) Tejas. According to reports, the negotiations are in advanced stages and the deal is expected to be sealed by September. The move comes at a time when India and the United States are navigating trade tensions following tariff-related disputes with the Donald Trump administration. This agreement will be the second major defence acquisition since the row, after New Delhi recently approved a ₹62,000-crore deal to procure 97 additional LCA Mark 1A fighter aircraft. Boost for Tejas Programme Hindustan Aeronautics Limited (HAL), the state-owned defence manufacturer, has already signed a deal with GE for 99 GE-404 engines to power the first batch of 83 LCA Mark 1A jets ordered by the Indian Air Force (IAF). With the latest deal, HAL will ensure continuity in its production line by securing a total of 212 GE-404 engines. The delivery timeline is also significant. Reports indicate GE is expected to supply at least two engines per month to meet India’s growing demand. This steady pace is expected to prevent bottlenecks in production, enabling HAL to adhere to its schedule of delivering the first 83 aircraft by 2029-30, followed by another batch of 97 fighters by 2033-34. Replacing the MiG-21s The expansion of the Tejas fleet comes as the IAF gradually retires its ageing fleet of MiG-21 fighters. The phasing out of these Soviet-era aircraft has been a long-standing priority for the government, given their obsolescence and safety concerns. The LCA Tejas, designed and developed in India, represents the country’s ambition to replace legacy platforms with indigenous alternatives while reducing dependence on foreign suppliers. Future Plans: GE-414 and Indigenous Engines Beyond the GE-404 engine deal, HAL is also engaged in negotiations with GE for the advanced GE-414 engines. These engines will power the upcoming LCA Mark 2 and India’s ambitious Advanced Medium Combat Aircraft (AMCA) programme. Reports suggest the GE-414 deal could involve up to 80 percent transfer of technology (ToT), a move aimed at strengthening India’s domestic defence ecosystem. In parallel, India is pursuing a long-term goal of developing an indigenous fighter jet engine. For this, it has partnered with French aerospace company Safran to collaborate on design and development. Such initiatives align with the government’s Atmanirbhar Bharat (self-reliant India) mission in the defence sector, where domestic capability-building has been prioritised. Strategic Significance The deal underscores the deepening defence ties between India and the US, even as trade disagreements continue. Analysts view this as a sign that both nations are committed to strategic cooperation in critical sectors like defence and technology, despite occasional economic frictions. For India, securing the timely delivery of engines not only ensures the smooth execution of its Tejas programme but also strengthens its long-term vision of building a robust, self-sustaining aerospace industry. With the MiG-21s nearing the end of their service and indigenous programmes gaining momentum, the IAF stands at the cusp of a historic fleet transformation. India’s $1 Billion Fighter Jet Engine Deal India is set to ink a $1 billion deal with US firm GE for 113 more GE-404 engines to power the indigenous LCA Tejas jets. This comes after a ₹62,000 crore order for 97 LCA Mark 1As, strengthening India’s push to replace ageing MiG-21s and boost self-reliance in defence. HAL will receive steady supplies, while talks for GE-414 engines with 80% tech transfer are also underway.