Rajnath Singh’s US Visit Strengthens Defence Cooperation Amidst HAL’s Jet Engine Supply Concerns

Washington D.C., USA: Indian Defence Minister Rajnath Singh is currently in the United States, focusing on expanding and deepening defence cooperation between the two nations. His visit comes amid growing anticipation that issues surrounding the timely delivery of General Electric’s F-404 engines, crucial for Hindustan Aeronautics Limited’s (HAL) Tejas Mark-1A fighter jets, may finally be resolved.

During the visit, India and the USA signed a Securities of Supplies Agreement (SOSA), a significant step in ensuring the smooth delivery of critical defence equipment, including the F-404 engines. These engines are essential for the Indian Air Force’s Light Combat Aircraft (LCA) Tejas Mark-1A program. However, delays attributed to supply chain disruptions at GE Aerospace have pushed back the initial delivery schedule.

HAL had originally committed to delivering 16 LCA Mk1A jets to the Indian Air Force by March 2024, but the first delivery has now been rescheduled to November 2024. The delays have raised concerns about the project’s timeline, with the full delivery of 83 jets expected by 2029. Despite these challenges, HAL has taken proactive steps to mitigate further delays by establishing a new production facility in Nashik, increasing its annual production capacity from 16 to 24 jets.

The positive developments from Rajnath Singh’s visit and the signing of SOSA have provided a boost to HAL’s stock, which has seen steady performance on August 23. Over the past 12 months, HAL’s stock has surged by 139 percent, more than doubling investors’ capital and significantly outperforming the Nifty, which delivered a 27 percent return during the same period.

The successful conclusion of the Defence Minister’s visit is expected to iron out the supply chain issues and reinforce the strong defense ties between India and the United States. This collaboration is seen as a pivotal moment in India’s defense modernization efforts, ensuring that the country remains on track to meet its strategic defense goals.