Deal for jet engine technology transfer with US runs into rough weather

New Delhi: The deal for fighter jet engine technology transfer with the US has run into rough weather, with likely increase in cost following deep technical discussions with the selected Indian partner, Hindustan Aeronautics Limited (HAL).

Sources said negotiations are on and the deal will result in over 80% technology transfer of GE414 INS6 engines, including coating for the hot end of the engine as well as crystal blades and laser drilling technology, but the initial estimated price is likely to exceed. The revision is likely to require internal approvals from the defence ministry to adjust for the additional costs.

Officials had earlier said that the deal is valued at around $1 billion and will involve technology transfer and the setting up of a production line in India which will initially get an order for 99 engines. US manufacturer GE Aviation did not comment on queries sent by ET.

The overrun of the initially estimated price is the latest in a series of similar problems with major defence deals involving technology transfer. Before the Rafale fighter jet deal was signed in 2016, it languished for years as discussions with HAL hit a roadblock given the high cost of domestic manufacturing. Similarly, the Scorpene submarine deal suffered from major cost and time overruns.

Discussions on a major project to develop a new fighter jet engine for fifth generation combat aircraft have languished for over eight years after discussions with France got stalled on pricing issues.

The deal with the US is important as the 99 engines will be manufactured in India and will power the Mk2 variant of the light combat aircraft. The Air Force has projected a demand for 120-130 of Tejas Mk2 fighters, which if accepted is likely to increase the size of the order beyond 99 engines.India is also developing twin-engine deck-based fighters for the Navy that are likely to be powered by F414. The first two squadrons of the futuristic advanced multirole combat aircraft will also be powered by the same engine.HAL has already identified land in Bengaluru for the new facility and the plan is to have it up and running within two years of the signing of the contract.