US Tariffs I Defence Sector: While the second tranche of 25 per cent US tariffs kicked in today, India and the United States are inching closer to finalise a USD 1 billion deal to procure 113 additional GE-404 engines from defence major General Electric for its Tejas Light Combat Aircraft (LCA) program.
Once signed, it would become the second significant defence pact during rising trade tension betweem India and the US.
The negotiations for the 113 engines are nearing completion and is expected to inked by September.
Earlier, the first deal involved a Rs 62,000 crore contract to acquire 97 more LCA Mark 1A fighter jets to bolster the south Asian nation’s combat fleet.
The new GE-404 engine deal will ensure fuel 83 Tejas jets ordered by the Indian Air Force by procuring 99 engines for the same.
With this follow-on order, HAL is expected to receive a total of 212 GE-404 engines.
The US-headquartered defence manufacturer General Electric is expected to maintain a steady delivery flow with two engines every month ahead of the first batch of Tejas jets slated for delivery by 2029-30.
The Tejas LCA is central to India’s efforts to replace its ageing fleet of MiG-21 fighter jets.
HAL is also in talks with GE for a second deal involving GE-414 engines, which would power the next-generation LCA Mark 2 and the indigenous Advanced Medium Combat Aircraft (AMCA). This deal is likely to include 80% transfer of technology, a key step toward India’s goal of achieving self-reliance in defence.
While the US tariff stance strengthens and will impact over USD 40 billion worth of Indian goods, cooperation in defence sector remains unaffected. Meanwhile, bilateral trade talks between both nations continue, however, the scheduled US delegation visit on August 27th had been postponed.
