Key Points of the HAL-GE Dispute
- Liquidated Damages: HAL has imposed financial penalties on GE Aviation for breaching the delivery schedule of F404 engines.
- Engine Shortage: Only six engines have been delivered out of the 99 ordered in 2021, with the sixth unit currently in transit from the U.S.
- 2026 Recovery Plan: GE has pledged to deliver 20 engines in the second half of 2026, though HAL officials view this as a conservative estimate.
- IAF Program Review: The Indian Air Force is scheduled to conduct a high-level review of the Mk1A program in May to assess delivery timelines.
- Production Readiness: While 20 airframes are ready at HAL, the lack of power plants remains the primary bottleneck for induction.
On Thursday, April 2, 2026, Hindustan Aeronautics Limited (HAL) confirmed that it is exercising the “Liquidated Damages” clause in its contract with GE Aerospace. This decision follows a protracted delay in the supply of F404-IN20 engines, the power plant at the heart of the Tejas Mk1A light combat aircraft.
HAL Chairman and Managing Director DK Sunil stated that while the manufacturing infrastructure for the Tejas is fully operational, the final assembly of the aircraft is entirely contingent on the availability of these American-made engines. Under the ₹48,000 crore deal signed in February 2021 for 83 jets, GE was expected to begin a steady supply of engines in 2024. However, to date, the U.S. firm has delivered only six engines.
Supply Chain Crises and Global Context
The delays are largely attributed to unprecedented bottlenecks in the global aerospace supply chain. GE Aerospace has cited the ongoing geopolitical volatility in the Middle East, specifically the conflict involving the U.S., Israel, and Iran, as a major factor slowing the manufacturing of critical engine sub-assemblies.
Despite these challenges, there are signs of movement. The sixth engine was recently handed over at a GE facility in the United States and is expected to reach India by the end of April. HAL anticipates having at least six aircraft fully fitted with Category-A engines by the end of the month.
The Path Ahead: IAF Review and Future Orders
The Indian Air Force (IAF) remains concerned about the induction schedule, as it needs the Tejas Mk1A to replace its aging fleet and bolster its shrinking fighter squadrons. A comprehensive review is planned for May 2026, where the IAF will evaluate the program’s progress and decide on the formal acceptance of the initial batch of fighters.
The pressure to resolve these supply issues is high, as the Tejas program has expanded significantly. In late 2025, HAL signed a separate $1 billion deal with GE for another 113 F404 engines to power an additional order of 97 Tejas Mk1A jets.
Fleet Grounding Resolved
In a related development, the IAF’s existing fleet of 34 Tejas Mk-1 aircraft is expected to resume flying operations by April 8, 2026. The fleet had been grounded for two months following an incident in February where a jet sustained airframe damage after overshooting a runway. HAL officials confirmed that a software glitch in the braking system has been identified and corrected, allowing the fleet to return to active service next week.
