India, US Near Mega Jet Engine Deal In Boost To PM Modi's Plan

The US and India are likely to agree to jointly manufacture fighter jet engines in the country when Prime Minister Narendra Modi visits Washington next week, a sign of closer military cooperation between the two countries in the face of China's growing assertiveness.

The deal is close to the finish line, according to people with knowledge of the matter, who asked not to be identified as the details are confidential. The White House is expected to clear the proposal from General Electric Co., the Massachusetts-based aerospace manufacturing giant, to produce the engines with state-owned Hindustan Aeronautics Ltd. for the Tejas light-combat aircraft, the people said.

PM Modi starts his first formal state visit on June 21. President Joe Biden will host him for a state banquet, and PM Modi will also address the US Congress. 

A number of the deliverables from PM Modi's visit "are not just bullet points on a page," US National Security Adviser Jake Sullivan said at a conference in New Delhi on Tuesday. "They are fundamentally designed to remove those obstacles in defense trading, in high tech trade, in investment in each of our countries."

Mr Sullivan is in India this week for meetings with top Indian officials ahead of PM Modi visit.

PM Modi's visit comes as the Biden administration is working to deepen its relationship with countries that are crucial to counter what it sees as China's growing threat. In deepening its ties with India the US has also appeared willing to overlook its democratic backsliding as it seeks to pull India away from Russia's sphere of influence. 

Ties between US and India have grown stronger as concerns over China have increased despite significant differences "in the fields of values and vision," said Sushant Singh, a senior fellow at New the Centre of Policy Research, a New Delhi-based think tank. "Those are currently being overridden by interests."  

The jet engine agreement, which would require technology transfer from America, will need approval from the US Congress, where India is banking on the general upswing in ties and bipartisan support to clear remaining hurdles. 

Bengaluru-based Hindustan Aeronautics Ltd. and India's Ministry of External Affairs didn't immediately reply to requests for comment. The US National Security Council had no comment, and GE declined to comment.

The jet engine agreement would fit in with PM Modi's wider push to boost defense manufacturing locally but with technology partnerships with nations that are keen to draw New Delhi into their orbit as Russia's war in Ukraine drags on into a second year. Earlier this month Germany's Thyssenkrupp AG's marine arm and India's Mazagon Dock Shipbuilders Ltd. signed an initial agreement to jointly build submarines for the Indian navy.

Russia remains India's largest supplier of military hardware, though purchases have slowed by 19% in the last five years due to sanctions and increased competition from other manufacturing countries. Russian deliveries of military supplies to India have ground to a halt as the countries struggle to find a payment mechanism that doesn't violate Western sanctions. 

The domestic production of the GE engines will strengthen India's fighter jet program and its air force, whose fleet of rapidly aging Russian fighters need to be replaced. It will also boost Modi's image as he looks at a third term in office in national elections next year. 

India and the US will also likely inch closer to agreements on other defense issues, including India's purchase of over a dozen armed drones that could exponentially boost its sea and land defense capabilities. Its current unmanned aerial vehicles can only be used for surveillance and reconnaissance, the people said. As border tensions with China flared in the summer of 2020, New Delhi borrowed two drones MQ 9B drones from the U.S. 

The drones' deal with the San Diego-based General Atomics has been mired in bureaucratic red-tape for years. In addition the two countries will be discussing jointly building the eight-wheeled armored personnel carrier - Stryker - in India.