India To Slap Penalties On GE Over Fighter Jet Engines Delay
(Bloomberg) --The Indian government will impose penalties on General Electric Co. for severe delays in the delivery of jet engines that power the country's light-combat aircraft, according to an official with knowledge of the matter.
Delivery of the F404 engines for Indian Air Force's locally-made Tejas Light Combat Aircraft Mk1 series was pushed back to March 2025, the official said, asking not to be identified because the information isn't public. The supply of the engines were supposed to start by 2023, according to India's state-owned Hindustan Aeronautics Ltd., which signed a $716 million deal with GE in 2021 for 99 F404 engines.
The delay complicates Prime Minister Narendra Modi's plans to manufacture fighter jets at home at a time when the country's relations with its neighbors China and Pakistan remain tense. It also comes amid attempts by the US and India to build closer military ties. Just last year, GE had signed a memorandum of understanding with Hindustan Aeronautics to produce an advanced version of the jet engines for India's next generation light-combat aircraft.
India's Defense Ministry and Hindustan Aeronautics declined to comment when contacted for further information. GE Aerospace said Tuesday the industry “continues to experience unprecedented supply chain pressures” and the company is working to resolve constraints, according to an emailed response to questions.
GE has been grappling with slowed delivery of its jet engines globally. Larry Culp, chief executive officer of the manufacturer, said this week that 15 different suppliers across its supply chain are involved in the disruptions.
India's fighter jet strength is rapidly dwindling, as the country retires its aging Soviet-era aircraft. Russia remains India's largest supplier of military hardware, though purchases have slowed in recent years due to sanctions and increased competition from other manufacturing countries.
Modi's government is trying to boost domestic production to reduce the country's dependence on foreign manufacturers. India has ordered a total 220 Tejas jets from Hindustan Aeronautics and another 180 fighter jets of the advanced version.
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