The ongoing tariff war between India and the United States has inevitably cast a shadow over the proposed jet engine supply and co-manufacturing agreements between India’s Hindustan Aeronautics Limited (HAL) and General Electric (GE).

The heart of the deal is for India to co-produce advanced GE F414 jet engines domestically, crucial for powering the next-generation TEJAS MK-2 fighters and India’s indigenous fifth-generation stealth Advanced Medium Combat Aircraft (AMCA) project.

This agreement is not only significant in terms of value—estimated to be around $1-$1.5 billion for 99 engines—but also in terms of technology, as it promises an unprecedented 80% transfer of technology (ToT). Key elements, such as single-crystal turbine blades and special thermal barrier coatings, would boost India’s defence manufacturing independence and operational capabilities.

However, the execution of the deal has faced several challenges. Firstly, there have been persistent delays in the supply of engines and in the finalisation of the agreement, attributed variously to supply chain disruptions, complex technology transfer negotiations, and regulatory reviews.

There is also speculation that these delays have occasionally been used as diplomatic or political leverage by the US administration. Notably, critical technologies like single-crystal blade casting and digital engine controls remain closely guarded, with only partial transfer considered, underscoring US reluctance to part with the “crown jewels” of its military tech.

Given this scenario, the question of whether India should cancel or reconsider the GE deal amid the intense tariff war requires a nuanced assessment:

Strategic Value: The GE engine deal is foundational for India’s ongoing efforts to bridge its military technology gap, reduce dependence on imports, and position itself as a regional aerospace manufacturing hub. No other partner currently offers a comparable ToT share, and domestically developing equivalent technology could take a decade or longer.

Technological Leap: Access to GE’s manufacturing processes for the F414 engine and its advanced components would modernise India’s aerospace industry in a way that alternatives from Russia, Europe, or indigenous projects are not yet capable of matching.

Supply Chain Risk: Ongoing delays and the use of supply as a pressure tactic during periods of geopolitical friction expose India to significant military and industrial risks. The dependency on US-controlled technology could be exploited in future disputes, restricting India’s strategic autonomy.

Diversification & Self-Reliance: The situation underscores the need for India to invest more seriously in domestic engine development and to pursue technology partnerships with multiple countries (France’s Safran, the UK’s Rolls-Royce, etc.), building redundancies and alternatives for critical defence technologies.

Risks of Cancelling The Deal

Cancelling the GE jet engine deal would expose India to several acute risks that could compromise its defence readiness for years to come. Firstly, both the TEJAS MK-2 and the next-generation Advanced Medium Combat Aircraft (AMCA) programs are engineered specifically around the GE F414 engine.

The cancellation would leave these critical platforms without a proven, qualified engine, causing significant delays in their induction and consequently hampering fleet modernisation. For the TEJAS MK-2—intended to replace India’s ageing MiG-21s and bulk up IAF squadron strength—production timelines could slip well past 2030, increasing the vulnerability created by declining squadron numbers.

Secondly, there is no viable indigenous alternative at present. The Kaveri engine, while under development for years, still lacks the thrust and reliability required for modern frontline fighters, making it unsuitable as a stopgap.

Partnering with other foreign suppliers, such as France’s Safran or Russia’s United Engine Corporation, presents new hurdles: it would require a substantial redesign of the aircraft, add multiple years of delay for integration and testing, and face uncertainties around technology transfer, intellectual property, and possible financial or political pushback from Washington due to third-country involvement.

Further, repeated disruptions or uncertainty regarding engine supplies have a historical precedent in undermining India’s indigenous defence capabilities and operational readiness. Past US sanctions (such as those after the 1998 nuclear tests) forced painful improvisation and delayed the TEJAS MK-1 program significantly.

Any repeat of such scenarios could endanger mission-critical fleet replacements and strategic imperatives, particularly as India seeks to counter regional threats amid rapid Chinese and Pakistani air power modernisation.

Summary

The tariff war injects uncertainty and highlights the vulnerabilities inherent in over-dependence on US technology, outright cancellation of the GE deal is inadvisable at this stage. The agreement is too strategically and technologically valuable—but India must treat the current frictions as a strong incentive to accelerate its domestic jet engine R&D and to broaden its defence technology partnerships globally.

Vigilance in contract structuring, proactive diversification, and assertive diplomacy should be the guiding principles for navigating this complex terrain.

IDN (With Agency Inputs)