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GE Nears Deal With India's Hindustan Aeronautics to Co-Manufacture Fighter Jet Engines

The Indian Air Force (IAF) Tejas fighter jet takes off during the joint ‘Exercise Cope India 2023’ between The United States Air Force (USAF) and IAF at the air force station in Kalaikunda, in India’s West Bengal state on April 24, 2023.
Dibyangshu Sarkar | AFP | Getty Images
  • General Electric is in final discussions to cement a partnership with India's Hindustan Aeronautics Ltd. to co-manufacture jet engines in the country, CNBC has learned.
  • The deal is expected to be signed either before or during a visit by Indian Prime Minister Narendra Modi to Washington, D.C., later this month.
  • A partnership of this sort would require the transfer of technology and therefore approval by Congress to move forward.

General Electric is in final discussions to cement a partnership with India's Hindustan Aeronautics Ltd. to co-manufacture jet engines in the country, CNBC has learned.

The deal, expected to be signed either before or during a visit by Indian Prime Minister Narendra Modi to Washington, D.C., later this month, would give the Indian aerospace company access to GE's highly coveted F414 engine, according to two people familiar with the deal who requested anonymity to discuss not-yet-public details.

The engines would be used utilized in fighter jets for India, the people said.

Earlier this week, U.S. Defense Secretary Lloyd Austin visited India and discussed the jet engine deal with Indian officials, sources told CNBC. 

The nature of the agreement — whether it will be labeled a partnership, joint venture or co-assembly — still remains to be seen. Two Indian startups are also a part of the venture, the sources said.

GE declined to comment.

A partnership of this sort would require the transfer of technology and therefore approval by Congress to move forward. Experts say once the U.S. State Department formally notifies congressional committees on Capitol Hill of the GE partnership, a 30-day period to approve the deal would begin.

Representatives for the State Department and the Indian government did not immediately return requests for comment. The Pentagon declined to comment.

"We know that sharing advanced technology is what India wants from the U.S. to show it is in this relationship for the long term," said Richard Rossow, chair of U.S.-India policy studies at the Center for Strategic and International Studies.

For years, India has relied on Russia for its defense needs, however, Indian defense officials have engaged in a series of meetings with Washington in recent years to procure U.S. equipment as well.

"What the Indians want is co-production. They want to develop and produce this equipment in India — not just be a foreign purchaser," said Daniel Silverberg, managing director at Capstone and a former national security advisor.

The potential GE deal comes as India's economy has grown exponentially, drawing more interest from corporate giants like Apple, Google and Amazon. In May, Apple CEO Tim Cook traveled to India and met with Modi as the iPhone maker opened its first two big retail stores in the country.

The emerging market is also increasingly seen as a way to counterbalance China's dominance in broader Asia.

"One policy objective of the U.S. administration is to strengthen the capacity of the Indian military to play a key role in the counter-China effort," said Silverberg.

GE Aerospace has been growing its presence in India for four decades, leveraging joint ventures to gain market share.

"We certainly see a lot of activity brewing in India," GE CEO Larry Culp told CNBC in late April, weeks after Air India placed a massive order for more than 800 GE LEAP engines.

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