Indian public sector company Hindustan Aeronautics Limited has formed a contract negotiation committee to complete the deal of GE-F414 with the US as soon as possible. The indigenous LCA Mk2 aircraft will be equipped with GE-F414-INS6 engines.
Negotiations are underway with the US company and high-level visits have taken place between the two sides. Both sides are now looking to complete the deal as soon as possible. Sources said that the Indian side is aiming to complete the deal in the next three months by the end of March 2025.
Meanwhile, defence sources said that a Memorandum of Understanding (MoU) was signed between HAL and General Electric Company on June 6, 2023, for the production of GE-F414-INS6 engines in India. "In the MoU, it was agreed that HAL and GE will work on the Purchase and Business Agreements for the production of Engines in India," they said.
They said engine parts representing 80 per cent of the value of the engine will be licensed through technology transfer, which is 22 per cent higher than the value agreed in 2012. The rough order value of about one billion USD at the 2023 price level which is subject to negotiation will be the total value of these agreements. Manufacturing License Agreement (MLA) and DSP-83 (Non-Transfer and Use Certificate) are mandatory requirements for the Transfer of Technology.
"The MLA & DSP-83 were signed by all stakeholders including Defence Ministry and GE, in September 2024," the defence sources said. HAL has constituted a Contract Negotiation Committee (CNC) and negotiations were initiated with GE, USA on December 3 earlier this month, defence sources said.
HAL has also requested GE to submit certain technical documents for evaluation of the depth of technology transfer, defence sources said. "It is agreed by both the parties to continue CNC discussions in 4 phases including the Transfer of Technology including the manufacturing technology, along with an assessment of the depth of technology being transferred that is up to 80% of the value of the engine," the sources said.
The terms and conditions associated with the Transfer of Technology including technical documentation, technical support and training are being discussed, as are the terms and conditions associated with supply which include delivery schedules, statement of work, price escalation formula, warranty, option clauses, etc. The negotiations are still ongoing and have not yet been concluded," defence sources said. "Therefore, at this stage, it is too early to conclude that there will be serious cost escalation in the process of acquiring GE 414 engines," defence sources said.
(With inputs from ANI)
