India and the United States are reportedly on the verge of finalizing a significant defense agreement, valued at over $1 billion, for the procurement of fighter jet engines. This deal involves the supply of 113 GE-404 engines from the American firm General Electric (GE) to power 97 LCA Mark 1A Tejas fighter jets.

This prospective agreement occurs amidst a backdrop of trade tensions between India and the US, exacerbated by recent tariff impositions. Former US President Donald Trump's decision to impose a 50% tariff on New Delhi, in response to India's trade relations with Russia, has strained the economic ties between the two nations. Despite these challenges, the defense partnership appears to remain strong, as evidenced by this impending engine deal.

The acquisition of these engines is crucial for Hindustan Aeronautics Limited (HAL), the Indian state-owned aerospace and defense company, to maintain a steady production line for the indigenously developed Light Combat Aircraft (LCA) Tejas. The deal aims to prevent potential delays in engine supplies, ensuring that HAL can meet its production targets. As per the current schedule, the first batch of 83 LCA Mark 1A aircraft is slated for delivery by 2029-30, with the subsequent 97 aircraft expected by 2033-34. GE is expected to supply two engines per month to fulfill its obligations to the Indian program.

In addition to this deal, HAL is also engaged in negotiations with GE for a separate agreement to acquire GE-414 engines, which includes a significant 80% transfer of technology. This deal, estimated at around $1.5 billion, aims to provide 200 GE-414 engines for India's LCA Mark 2 and Advanced Medium Combat Aircraft (AMCA) programs. The GE-414 engines will be integrated into 162 LCA Mark 2 aircraft and 10 prototypes for the AMCA.

The new fighter jet program is part of the Indian Air Force's strategy to replace its aging fleet of MiG-21s. India is also collaborating with the French firm Safran on an indigenous fighter aircraft engine project. This initiative aligns with India's broader objective of achieving self-reliance in defense manufacturing.