Negotiations between India and GE Aerospace for the F414 fighter jet engine programme have reached an impasse over pricing, potentially affecting timelines and costs for the Advanced Medium Combat Aircraft (AMCA) programme and other future fighter aircraft projects, according to a report by The New Indian Express.
The report said technical discussions have largely concluded, but commercial negotiations remain unresolved because of differences over engine pricing, technology transfer and manufacturing arrangements.
According to the report, the F414 engine was initially expected to cost about Rs 70 crore to Rs 80 crore per unit. However, GE Aerospace has now sought a price nearly three times higher, making it the central issue in the ongoing commercial discussions.
The negotiations extend beyond engine purchases and include technology transfer, licensed production, maintenance, repair and overhaul facilities, spare parts, warranties, delivery schedules and future price-escalation mechanisms.
The development is significant because the AMCA prototype programme alone requires 15 F414 engines for five flying prototypes. The same engine has also been selected for the Tejas Mk-2 and the Twin Engine Deck-Based Fighter programme, taking India's projected requirement to more than 200 engines over the coming years.
ALSO READ: HAL Q4 Results: Defence PSU's Net Profit Rises 5.5% YoY To Rs 4,196 Crore
"The company knows the programme is built around the F414 and that changing engines now would be extremely difficult. That gives GE significant leverage during commercial negotiations," a source told The New Indian Express.
The report also said GE Aerospace has sought about Rs 6,000 crore to establish a dedicated F414 assembly and manufacturing line in India to support future requirements of the Tejas Mk-2, early AMCA production and the Twin Engine Deck-Based Fighter programme.
Engine Supplies Remain Key For HAL Programmes
The reported negotiations come as engine availability remains a critical factor for Hindustan Aeronautics Ltd.'s fighter aircraft production plans.
During its post-earnings conference call on May 15, HAL said it expected to begin deliveries of Tejas Mk1A fighter aircraft to the Indian Air Force by August or September after delays linked to engine supplies and testing activities.
"We are hopeful that by August-September we should be able to start the delivery," HAL Chairman and Managing Director Ravi Kota said during the conference call.
HAL said it had received six engines from GE Aerospace and expected additional supplies during the current financial year. Kota said aircraft fitted with the newly supplied engines were already flying and undergoing further refinements and testing.
The company also said GE Aerospace had committed further deliveries during FY27. Kota said HAL expected to receive around 15 to 20 additional engines during the year, although final numbers had not been confirmed.
Tejas Deliveries Seen As Key Execution Trigger
The Tejas Mk1A programme remains one of the most closely tracked projects for HAL because delivery delays have affected production schedules and execution visibility.
Finance Director Barenya Senepati said manufacturing revenue could play a larger role in FY27 if deliveries of the Tejas Mk1A and HTT-40 trainer aircraft begin during the year.
"If hopefully our LCA programme and HTT-40, if we are able to deliver, then manufacturing sale will play a dominant role," Senepati said during the earnings call.
HAL reported revenue from operations of Rs 33,050 crore in FY26, up 7% from a year earlier, while profit before tax increased 12% to Rs 12,112 crore. The company's order book stood at Rs 2.54 lakh crore at the end of FY26.
Goldman Sachs, following the earnings announcement, maintained its neutral rating on HAL and said Tejas Mk1A deliveries would remain an important trigger for the stock.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.