Author: Parikshit Luthra 
Publication: CNBCTV18
Date: June 7, 2023
URL:    https://www.cnbctv18.com/india/general-electric-hal-deal-on-jet-engines-done-narendra-modi-us-visit-joe-biden-16866381.htm?s=03

The American defence company will be entering into an agreement with India's Hindustan Aeronautics Limited to co-produce jet engines in India. The central government is yet to announce a site for the co-production of GE jet engines.

Prime Minister Narendra Modi and US President Joe Biden are all set to announce a mega defence deal during their upcoming meeting between June 21-24, 2023, in Washington DC. After the US government gave the go-ahead to General Electric (GE) to transfer jet engine manufacturing technology to India, the two sides reached an in-principle agreement on the deal.

The American defence company will be entering into an agreement with India's Hindustan Aeronautics Limited (HAL) to co-produce jet engines in the South Asian nation. The technology will power India's fighter jet program once the Memorandum of Understanding (MoU) is operationalised.
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CNBC-TV18 (@CNBCTV18News

.@generalelectric & Hindustan Aeronautics are set to manufacture fighter jet engines in India. Sources say the Biden administration has given permission for GE to co-produce the engines in #India ahead of PM Modi's U.S. visit later this month. @Parikshitl reports. pic.twitter.com/OsRkSuDgtu

June 6, 2023

It is significant to note that GE and HAL had entered into an agreement to manufacture jet engines in 2012, but the deal could not take off as the government wanted higher levels of technology transfer.

Sources say to CNBC-TV18 that an agreement on higher levels of technology transfer has been agreed upon and no other ally has this kind of an agreement with the United States. Modalities of technology transfer, timelines and payment mechanisms are now being discussed before the final agreement is inked during the Prime Minister's visit.

The central government is yet to announce a site for the co-production of GE jet engines in India. However, HAL already has an engine division in Koraput, Odisha and this could be one of the locations under consideration. Sources have also said that 500-600 Indian Micro, Small & Medium Enterprises (MSMEs) could benefit from this agreement.

Discussions on possible collaboration on jet engines took place in February during NSA Ajit Doval's meeting with his counterpart Jake Sullivan. While the deal will need the approval of the US Congress, an agreement has been reached at the highest political level. The deal contours were reviewed by Defence Minister Rajnath Singh and US Secretary for Defence Lloyd Austin, during the latter's visit to India this week.