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.

 

[nivas9531]

$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.

What is the guarantee if they make delays
First of all cancel all f-404 engines order
And find some from other sources, or even indigenous tech. Even in our house hold things we make option B
But total dependence of one vendor will lead to this arm twisting, and never to be reliable relationship

 

[DS]

The GE 414 engines for fighters are combat proven . A requirement for induction in our fighters. Skilled negotiations with GE can be made by us to control costs by giving favourable status as IN has done for GE LM2500 engines for warships. In fact GE LM2500 marine engines are being licence produced in HAL very successfully.

 

[Ammoman]

You never get any real IP. Most of the engines will be knock down kits just like we get from Russia. We just need the engines. Just buy them from GE. We will get no knowledge anyway. Just pay twice what it should cost. We should know this my now. Maybe this creates a pile of cash for the bribes that will be paid.

Don't attack me on this, I live in the US and work for a large multinational in the defence game. We all know the game and what people from countries like India demand. There is a reason why India is a third world country or developing country, whatever. I a Indian and it is sad.

 

[DS]

As warriors we went to war against our adversaries with equipment procured from overseas. The IN was then a BUYERS NAVY , we progressed to BUILDERS NAVY and currently we are DESIGNER NAVY. Our Stealth warships are DESIGNED at home to our NSQRS to ensure combat capabilities of HIT FIRST, HIT HARD , KEEP HITTING. An example our Project 17 Frigates today whose NSQRS I wrote in DSR NHQ.

Stealth Frigates have further evolved to type 17A ( NILGIRI CLASS ) and progressing to Type 17B . The IN is upgrading its warships for 21st century combat. The sine qua non being it is done totally at home with our scientists and engineers silently. The aim being to provide our warriors excellent combat capabilities far away from home in hostile territories. The man behind the machine then makes the difference between victory and defeat in combat.

Hence the IN chose combat proven engines like GE LM2500 engines for its new aircraft carrier Vikrant and Stealth Frigates. The new incoming fighter aircraft being built at home must have engines proven in combat . GE414 are fitted on frontline fighters of USAAF and USN today like GROWLERS / F-18 .

Then we evolve further and upgrade silently with full backing to our scientists and engineers to produce advanced engines at home.

See the advanced missiles being now produced at home . They are world class I assure you.

 

[Ammoman]

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

GE will never give IP for critical parts and manufacturing. 10s of Billions have been spent. GE is not stupid.

India has a very bad habit of announcing a contract before all negotiations are done. Easy to jack up the price. Blame the politicians for this. All they care about is the pat on the back. Crappy business people. What do you expect when you a monk with no education running a state.