HomeIndian DefenceGE F-414 Deal Cost Negotiations: U.S. Wants $1.1 Billion, While India Offers...

GE F-414 Deal Cost Negotiations: U.S. Wants $1.1 Billion, While India Offers $80 Million Per Unit: Requirement is for 1,000 engines

Source : IgMp Bureau

GE F-414 Deal Cost Negotiations: U.S. Wants $1.1 Billion, While India Offers $80 Million Per Unit: Requirement is for 1,000 engines
General Electric F-414 jet engine, that will be manufactured in India by Hindustan Aeronautics Limited (HAL) under technology transfer agreement

India’s defense deal with the US for the acquisition of 31 MQ9B drones and the manufacturing of GE F-414 jet engines in Bengaluru has reached a critical stage of negotiations, as reported by Business Line.

Advancing Negotiations

According to top Ministry of Defence sources, India has forwarded the manufacturing license agreement (MLA) to the US last month for the development of engines by Hindustan Aeronautics Ltd (HAL) in Bangalore. This agreement includes full transfer of technology from GE Aerospace.

Once the MLA is accepted by the US, commercial negotiations for the production of the GE F-414 engines will commence. The finalization of the MLA is expected in the next couple of months, paving the way for HAL to acquire the core technology necessary for manufacturing next-generation fighter jet engines.

Negotiation Details

While the US is proposing a price of $1.1 billion per engine, India has offered $80 million along with payloads. India is aiming to negotiate a lower price, hoping that the US will eventually agree to less than $1 billion per engine.

This negotiation is unique as it marks the first time the US is allowing a country to produce GE F-414 engines outside its jurisdiction. As such, there are no international precedents to guide the negotiation process.

Long-Term Requirement

The Ministry of Defence sources have indicated that India will need approximately 1,000 engines to power various versions of fighter jets, including the TEJAS MK-2, Advanced Medium Combat Aircraft (AMCA), and Twin Engine Deck Based Fighter (TEDBF).

Both countries have agreed that HAL can produce engines beyond the agreed fixed number after paying a royalty per engine. The memorandum of understanding (MoU) between GE and HAL was signed on June 22, 2023, in Washington during Prime Minister Narendra Modi’s official visit to the USA.

Conclusion

The negotiations for the GE F-414 engines and the MQ9B drones are critical for India’s defense modernization efforts. Successfully concluding these negotiations will not only strengthen India’s defense capabilities but also enhance its indigenous manufacturing capabilities.

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