GE Demands $500M More for F-414 Engine's 80% ToT to HAL, Raising Concerns Over India's Tejas Mk2 Program Timeline

Negotiations between General Electric (GE) and Hindustan Aeronautics Limited (HAL) for the licensed production of F-414 engines in India have hit a snag. GE has reportedly increased its asking price for the deal, which includes an 80% Transfer of Technology (ToT) clause, by $500 million.

This unexpected rise, from the initially agreed $1 billion to $1.5 billion, has introduced delays as both sides renegotiate the final contract value.

The increased cost is attributed to a significant expansion of the ToT offered to HAL. Sources indicate that the new agreement includes a 22% increase in technology transfer compared to a previous 2012 deal. This enhanced ToT aims to provide India with greater capability and self-reliance in jet engine technology, a key objective for the nation's defence industry.

To manage the complexities of the negotiation, HAL has established a dedicated Contract Negotiation Committee (CNC) and is currently reviewing technical documents provided by GE to evaluate the proposed technology transfer.

Despite the price hike and subsequent delays, HAL remains confident in finalizing the agreement with GE by the end of March 2025. However, concerns are growing that protracted negotiations may impact the timeline of India's Tejas Mk2 program, which relies heavily on these engines.

This situation underscores India's ongoing efforts to achieve self-reliance in critical defence technologies. In addition to collaborating with global manufacturers like GE, India is actively pursuing the development of its own indigenous jet engine and may soon announce a partnership with an international partner to accelerate this endeavor.

The advanced ToT offered by GE in the F-414 deal is expected to be instrumental in bolstering India's domestic jet engine manufacturing capabilities.

While the increased cost presents a hurdle, the potential benefits of the expanded technology transfer are substantial for India's long-term defence goals. The coming weeks will be crucial as HAL and GE strive to reach a mutually agreeable outcome that balances cost considerations with the strategic importance of enhanced technological know-how.

 

[sarvabowma]

Take $250 million more and give the balance 20% technology.

 

[dunla52]

$500Mln is fine as long as we get the necessary tech in return, if we are paying $300Mln for one Rafale, why not pay and get the tech, US is not like France to not to honor the promised obligations, whatever they say upfront they will do it, or else what other options we have, it is already too late, we can’t find another reliable adequately powered engine for our future jets.

American screw All it's customers the extra 500 mn can help get Kaveri developed

 

[amitabha]

can't we use Safran as an alternative? I am not an expert. just want to know reasons

 

[Ashok Kandimalla]

Dear Sir,

You said quote "The increased cost is attributed to a significant expansion of the TOT offered to HAL" What does the expansion of the TOT mean? Is an increase in the scope? Did the earlier figure of $1B not include 80% TOT? How was this figure arrived at? Did the $1B include TOT or just local manufacture.

Could you clarify?

 

[Foxbat]

You do realise that India's reliance on the West was exceptionally limited between the early 1960s and the early 2000s in most areas, right? We over-relied on Russia in that period, and have little to show for it.

Need I remind you of just how many times we have been duped by Russia in these defence contracts?

1. Look up the fact that the Russians promised to transfer the expertise to India to refit submarines in return of the Kilo-class purchase, and did nothing of the sort, to the point that we spent over a decade each refitting two of our boats and learning how that was done.

2. The Ka-226 ToT disagreement is another story.

3. The Russians tried swindling us over the FGFA, and we were lucky to get out when we did.

4. The Russians were in favour of having India build the last two Rajput-class (Kashin mod) destroyers, only to backtrack at the last moment and dramatically jack up the prices.

There are a number of other examples too. See, Russia has helped us a lot, but they too have cheated us, and have always extracted their pound of flesh for that help.

Yet there are many who clamouring for Russian engines and suggesting that we should buy Su 57. The Russian know very well that the Indians can be easily milked since India is looking for pbartnership and collaboration with a willing party to gain knowledge on new technologies. In my opinion I think there is no good guy who respect Indians aspirations to learn the nitty gritty of latest technology. The countries which India approaches to collaborate they all if not most of them give India the run around to their terms.

 

[Leored]

Only fool will stop this deal. When time comes we have to beg. This is panelty for not going independent from beginning. Now dump more money and get indigenization of new engine.