GE nears fighter jet engine deal with India’s Hindustan Aeronautics

General Electric Final discussions on consolidating partnership with India under way Hindustan Aeronautics Limited CNBC has learned that the jet engine is co-manufactured in the country.

The deal, which is expected to be signed before or during Indian Prime Minister Narendra Modi’s visit to Washington, D.C. later this month, will give Indian aerospace companies access to GE’s coveted F414, according to two people familiar with the matter. engine. who requested anonymity to discuss details that have not been made public.

Those engines will be used in India’s fighter jets, the people said.

U.S. Defense Secretary Lloyd Austin visited India earlier this week and discussed the jet engine deal with Indian officials, sources told CNBC.

The nature of the agreement – whether it will be labeled as a partnership, joint venture or co-assembly – remains to be seen. Two Indian startups are also part of the venture, the sources said.

GE declined to comment.

Such partnerships require technology transfer and therefore require congressional approval to move forward. Experts say the 30-day deadline to approve the deal will begin once the State Department formally notifies congressional committees on Capitol Hill of the partnership with GE.

Representatives for the State Department and the Pentagon did not immediately respond to requests for comment. The Indian government had no immediate comment.

“We know that sharing advanced technology is what India wants from the United States to show that it is in the relationship for the long haul,” said Richard Rosso, chair of U.S.-India policy studies at the Center for Strategic and International Studies.

For years, India has relied on Russia for its defense needs, however, Indian defense officials have held a series of meetings with Washington in recent years to procure US equipment.

“What the Indians want is joint production. They want this equipment to be developed and produced in India — not just with foreign buyers,” said Daniel Silverberg, managing director of Capstone and a former national security adviser.

GE’s potential deal comes at a time when India’s economy is growing exponentially, attracting more interest from corporate giants such as apple, Google and amazonIn May, Apple CEO Tim Cook traveled to India and met Modi as the iPhone maker opened its first two major retail stores in the country.

Emerging markets are also increasingly seen as a way to counter China’s dominance in wider Asia.

“One of the U.S. government’s policy goals is to strengthen the Indian military’s ability to play a key role in anti-China operations,” Silverberg said.

GE Aerospace has been expanding its presence in India for four decades, using joint ventures to gain market share.

“We’re certainly seeing a lot of activity brewing in India,” GE CEO Larry Culp told CNBC in late April, a few weeks after Indian airlines placed a bulk order of more than 800 GE LEAP engines.