Amid the Trump tariff dispute, India and the US are due to finalize a $1 billion Tejas jet engine contract.

With an agreement worth more than USD 1 billion to buy 113 engines for 97 LCA Mark 1A Tejas fighter planes, India and the US are almost done with a major defense deal. The 99 GE-404 engines that were already contracted for the first 83 Mark 1A jets would be supplemented by this new order.

The move coincides with strained relations between China and India after Donald Trump decided to levy a 50% tariff on New Delhi for its commerce with Russia.

According to defense sources, the 113 engines’ negotiations are almost over, and a deal is probably going to be inked by September of this year.

In order to prevent any kind of engine supply delays, the acquisition attempts to provide a steady supply of engines for Hindustan Aeronautics Limited (HAL), which is producing the domestic Light Combat Aircraft (LCA).

HAL needs this consistent supply in order to reach its manufacturing goals. The first batch of 83 aircraft is expected to be delivered by 2029–2030, and the next batch of 97 by 2033–2034. In order to fulfill its commitment to the Indian program, the American company GE is anticipated to send two engines each month.

In the meantime, HAL and GE are negotiating a different agreement for HAL to purchase GE-414 engines with an 80 percent technology transfer. In the upcoming months, a deal worth approximately USD 1.5 billion is anticipated to be completed to provide 200 GE-414 engines required for India’s Advanced Medium Combat Aircraft (AMCA) and LCA Mark 2 programs.

HAL is in advanced negotiations with GE to purchase 200 GE-414 engines for the upcoming LCA Mark 2 and Advanced Medium Combat Aircraft (AMCA) programs. This is a different but no less significant development.

This agreement, which is estimated to be worth USD 1.5 billion, is anticipated to involve a substantial 80% technology transfer, which would be a big step toward India’s objective of being self-sufficient in defense manufacture.

Ten AMCA prototypes and 162 LCA Mark 2 aircraft will be powered by GE-414 engines. The Indian Air Force’s larger plan to replace its aging fleet of MiG-21s, which are nearing the end of their phase-out, includes the new fighter aircraft program.

Additionally, India is collaborating with the French company Safran on a domestic fighter aircraft engine project.