A landmark deal between GE and Hindustan Aeronautics Limited (HAL) that includes unprecedented technology transfer, manufacturing of jet engines in India and licensing arrangements marks the beginning of a new era in India-US ties where technological ties are likely to emerge as the central axis of the relationship. On the American side, the significance of the deal is underlined by the fact that jet engine technology is considered a strategic asset that the US hasn’t shared even with close allies. That the US government broke from practice to put together the deal represents a vote of confidence. For India, the agreement can make up the gap between domestic manufacturers and international standards, and bolster defence deterrence and offensive capabilities. Of course, that this deal comes at a time when New Delhi is locked in a tense standoff at the Line of Actual Control with Beijing is instructive; the technology transfer, in fact, could help India spur its defence manufacturing and aerial power, bridging the gap with China.
For decades, India’s concerns around licensed production and sale of defence equipment have been around technology transfer. If the GE deal can operationalise a model of advanced technology sharing, it will become the template going forward, helping Indian defence manufacturers, including start-ups, to design and produce equipment in partnership with US companies and accelerating the country’s sputtering indigenisation process. For Washington, of course, this is part of a larger calculation of assisting regional anchors to deter Chinese aggression. On that road, the GE deal is a major step forward.