Even as Donald Trump’s steep 50% tariffs on Indian goods kick in, India is reportedly moving ahead with a nearly $1 billion deal to procure 113 additional GE-404 engines from U.S. defence giant General Electric for its Tejas Light Combat Aircraft (LCA) program.
The agreement is expected to be signed by September, according to an ANI report.
If true, this would be the second major defence deal sealed amid rising trade tensions between New Delhi and Washington. The first — a ₹62,000 crore contract to acquire 97 more LCA Mark 1A fighter jets — was signed recently to strengthen India’s homegrown combat fleet.
The new GE-404 engine deal will ensure steady supply to Hindustan Aeronautics Limited (HAL), which had earlier signed a contract for 99 engines for the first 83 Tejas jets ordered by the Indian Air Force. With this follow-on order, HAL is expected to receive a total of 212 GE-404 engines.
GE is expected to deliver two engines a month under the new arrangement, allowing HAL to maintain its manufacturing timeline through 2034. The Tejas LCA is central to India’s efforts to replace its ageing fleet of MiG-21 fighter jets.
HAL is also in talks with GE for a second deal involving GE-414 engines, which would power the next-generation LCA Mark 2 and the indigenous Advanced Medium Combat Aircraft (AMCA). This deal is likely to include 80% transfer of technology, a key step toward India’s goal of achieving self-reliance in defence.
India is also collaborating with French aerospace firm Safran to develop a fully indigenous fighter aircraft engine, in a parallel effort to reduce dependency on foreign suppliers.
Despite the sharp escalation in trade tensions — with new U.S. tariffs expected to slash Indian exports by over 40% — defence cooperation appears unaffected. Talks on a bilateral trade agreement continue, though a scheduled U.S. trade delegation visit to India on August 25 was postponed.