State-owned Hindustan Aeronautics Limited (HAL) has started imposing liquidated damages on GE Aerospace due to delays in supplying F404-IN20 engines required for the Tejas Light Combat Aircraft (LCA) Mk1A programme. The move follows the company invoking a penalty clause in its contract after deliveries failed to meet the agreed schedule.
HAL had placed an order worth around USD 700 million for 99 F404-IN20 engines to power the Tejas Mk1A fighter jets, with deliveries originally expected to begin in 2024. However, only six engines have been supplied so far, resulting in a delay of over two years and affecting the overall production timeline of the aircraft.
Under the terms of the agreement, HAL is entitled to levy penalties for each delayed engine. The company has now begun applying these fines on a per-engine basis as delays continue.
The Tejas Mk1A is a crucial upgrade in India’s indigenous fighter jet programme and is expected to significantly strengthen the operational capabilities of the Indian Air Force.
In addition to the initial order, HAL had also signed a separate contract worth approximately USD 1 billion with GE Aerospace for the supply of 113 additional F404 engines for a second batch of Tejas Mk1A aircraft.
Despite the penalties, HAL officials stated that discussions with GE Aerospace are ongoing, with efforts focused on accelerating engine deliveries and reducing further disruptions to the fighter jet production schedule.
