India invokes penalty clause as US aerospace giant GE delays jet engines, claim Reports; MoD refutes

New Delhi: Ministry of Defence has invoked a penalty clause against the US aerospace giant GE after facing a delay of more than 18 months in the supply of aero-engine. Media reports claimed it citing sources.

Sources were cited saying that the penalty clause had to be invoked as there was no other option left.

“The contract and its clauses have to be enforced lest the CBI and the Central Vigilance Commission will hound the MoD officials,” the sources said.

GE is learnt to have told the Indian side that one its South Korean suppliers that manufactures parts of the engine was facing a crisis, which had delayed the supply of aero-engines, said the reports.

The US firm has promised to start supplying 24 engines each year from April 2025. In 2021, GE had signed a $716 million contract with the MoD-owned Hindustan Aeronautics Limited (HAL) to supply 99 F404-GE-IN20 engines for the Tejas Mark-1A jets. As per the contract, the company was to supply 16 engines per year beginning April 2023.

Meanwhile, Ministry of Defence has refuted such claims of invoking penalty against GE, stating that the agreement is between HAL & the American Aerospace Company.