Few topics have evoked as much interest in recent days as the impending agreement between General Electric and Hindustan Aeronautics Ltd (HAL) to co-manufacture jet engines in India. The US and India are negotiating the agreement intensely since it will involve the transfer of sensitive technologies. 

Hear is a break down of the significance of the imminent deal:

1. Back in 2010, India shortlisted the GE-F414 engine to power the second version of its light combat aircraft, TEJAS. The plan, according to some media reports, was for General Electric to supply some engines initially before co-manufacturing them in India.

2. This was a particularly important step for New Delhi, which has traditionally faced setbacks in its quest to build more powerful jet engines domestically. However, plans to transfer technology fell afoul of America’s strict technology export controls.

3. The jet engine deal was then placed on the backburner for years. It returned to the public spotlight this year after India and the US announced new details of their newly unveiled Initiative on Critical and Emerging Technologies (iCET).

4. To boost India-US defence ties, America committed to an expeditious review of the jet engine deal. Matters have moved quickly since. US Secretary of Defence Lloyd Austin and National Security Adviser Jake Sullivan visited India this month, reportedly to close the deal, which both sides expect to announce during Prime Minister Narendra Modi’s upcoming state visit to America.

5. The deal matters for a number of reasons. First, it represents a significant step forward for the India-US defence relationship. Previous attempts to share defence technology, such as the Defence Trade and Technology Initiative, did not live up to expectations. The GE deal, which will involve the transfer of technology to India, could mark a decisive shift from these past failures.

6. Second, the deal will allow India to make advanced jet engines. Very few countries – namely the US, Russia, France, UK and China – have this capability. The jet engine deal will thus be an important step forward in India’s journey to develop a domestic defence industrial base.

7. The deal will also boost India’s attempts to modernise and upgrade its fighter-jet fleet. According to some reports, the GE-F414 jets will likely be used to power future fighter jets such as the TEJAS MK-2 and the Advanced Medium Combat Fighter Aircraft. It will also be an important test of India's public-sector defence enterprises such as HAL, given the scale and strategic value of these fighter jets.