Penalty clause invoked against General Electric for engine delays for LCA-Mk1A

India invokes contractual obligations on GE for F-404 engine delays for LCA-Mk1A jets, amid supply chain issues and penalties.

India has invoked the contractual obligations on U.S. engine manufacturer General Electric (GE) for repeated delays in deliveries of the F-404 engines to power the indigenous Light Combat Aircraft (LCA)-Mk1A manufactured by Hindustan Aeronautics Limited (HAL). However, sources said there were politics involved, and termed it a “pure logistical issue.”

There are two engines available with GE now that will be given to India, sources said. They will be used to deliver two jets to the Indian Air Force (IAF) to account for deliveries in the current Financial Year.

The regular delivery of engines is now expected by March-April 2025, which is a two-year delay from the contractual terms, an official source in the know said. As per the contract, the original equipment manufacturer will be penalised and the same will be implemented, the source said. Another source in the know confirmed that the penalty clause in the deal has been invoked.

The engine delays were also discussed between the National Security Advisors of the two countries when they met and was also taken up during the visit of Defence Minister Rajnath Singh.

In February 2021, the Defence Ministry had signed a ₹48,000 crore deal with HAL for 83 LCA-Mk1A, a more capable fighter than the current LCA-MK1 in service. Following this, in August 2021 HAL signed a $716 mn deal with GE Aviation for 99 F-404 aircraft engines and support services for the LCA-Mk1A. As per the contract, three LCA-MK1A were to be delivered to the Indian Air Force (IAF) in February 2024 and 16 aircraft per year for subsequent five years.

“GE issue is a purely logistical issue. There are no politics involved,” the first source said, adding that GE has supply-chain issues with the engines and they are now tying that up to restart regular production.

In response to a query from The Hindu, a GE Aerospace spokesperson reiterated their earlier response, “The Aerospace industry continues to experience unprecedented supply chain pressures. GE Aerospace is working with our partner HAL and suppliers to resolve constraints and deliver F404-IN20 engines for the LCAMk1A programme.”