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Working towards developing the LCA Mark 2 fighter aircraft, the Indian public sector firm Hindustan Aeronautics Limited has formed a contract negotiation committee early this month to conclude the deal with the US at the earliest.
The indigenous LCA Mk2 aircraft is set to be powered by GE-F414-INS6 engines. The negotiations with the American firm have been going on and high-level visits have taken place between both sides. The two sides are now looking at concluding the deal at the earliest. The Indian side is aiming to conclude the deal in the next three months by the end of March 2025, sources told ANI. Meanwhile, defence sources said that a Memorandum of Understanding (MoU) was signed between HAL and General Electric Company on 6th June 2023 for the production of GE-F414-INS6 Engines in India. "In the MoU, it was agreed that HAL and GE will work on the Purchase and Business Agreements for the production of Engines in India," they said. Engine parts representing 80 per cent of the value of the engines will be licensed through Transfer of Technology which is 22 per cent higher than what was agreed in 2012, they said. The rough order values around USD one billion at the 2023 Price Level which is subject to negotiation would be the total value of these agreements. The Manufacturing License Agreement (MLA) and DSP-83 (Non-Transfer and Use Certificate) are mandatory requirements for the Transfer of Technology. "The MLA & DSP-83 were signed by all stakeholders including Defence Ministry and GE, in September 2024," the defence sources said. Defence sources said that the HAL has constituted a Contract Negotiation Committee (CNC) and Negotiations with GE, USA were initiated earlier this month on December 3. Defence sources said that HAL has also requested GE to submit a few technical documents for evaluation of the depth of transfer of technology. "It is agreed by both the parties to continue CNC discussions in 4 phases including the Transfer of Technology including the manufacturing technology, along with an assessment of the depth of technology being transferred that is up to 80% of the value of the engine. Terms and conditions associated with the Transfer of Technology including Technical Documentation, Technical Assistance, and Training are being discussed along with the terms and conditions associated with supplies including delivery schedule, statement of work, price escalation formula, warranty, option clause etc. Defence sources said the negotiations are still going on and are yet to be concluded. "Therefore, at this stage, it is premature to conclude that there would be serious cost escalation derailing the process of acquiring the GE 414 engines," Defence sources said. (ANI)
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