India's plans to move ahead with its ambitious Advanced Medium Combat Aircraft (AMCA) programme have encountered a major challenge as negotiations with US defence company General Electric (GE) over the F414 fighter jet engine have become increasingly difficult. The discussions have reportedly been affected by a sharp rise in costs, creating concerns about the affordability and timeline of India's flagship fifth-generation fighter aircraft project.

According to sources, the price of the GE F414 engine has increased significantly during commercial negotiations. The engine, which was earlier estimated to cost around Rs 70–80 crore per unit, is now reportedly priced at more than Rs 200 crore. This steep rise has become one of the biggest obstacles in finalising the agreement between the two sides.

The F414 engine plays a crucial role in India's future fighter aircraft plans. It has already been selected to power the Light Combat Aircraft (LCA) Tejas Mk-2. It was also chosen as the interim engine for the first version of the AMCA. Under the current development plan, the engine will be used in the first two to four squadrons of the stealth fighter before a more powerful indigenous engine is developed for future variants.

The latest development is being seen as a setback for what was earlier projected as a landmark defence partnership between India and the United States. During Prime Minister Narendra Modi's state visit to the US in 2023, GE Aerospace and Hindustan Aeronautics Limited (HAL) signed an agreement to manufacture F414 engines jointly in India.

The agreement later received approval from the US Congress, clearing the way for technology transfer, local production and licensing arrangements. At the time, the deal was considered a major breakthrough because GE agreed to transfer nearly 80 per cent of the technology required to manufacture the engines in India.

HAL had stated that the partnership would support the Tejas Mk-2 programme and also help build a foundation for future indigenous fighter engine development. The company had planned local production of 99 F414 engines under the arrangement.

However, commercial negotiations have reportedly turned out to be more complicated than initially expected. Apart from the price of the engines, discussions are also focused on manufacturing arrangements, support packages, localisation commitments and the terms of technology transfer.

Sources said GE has proposed setting up a dedicated F414 engine assembly and manufacturing facility in India. However, the company has reportedly sought an investment of more than USD 800 million, which is close to Rs 6,000 crore, for establishing the production line.

The proposed facility could support future engine requirements for several major defence programmes, including the AMCA, Tejas Mk-2 and the Twin Engine Deck-Based Fighter (TEDBF). Despite the long-term benefits, the high investment requirement has become another important issue in the ongoing negotiations.

India's immediate requirement for the engine is substantial. The AMCA prototype phase includes the construction of five aircraft. Since the fighter is a twin-engine platform, around 15 engines will be needed. This figure includes additional engines required for testing and evaluation activities.

The aircraft's flight-testing programme is also expected to be extensive. The testing phase is likely to continue for nearly seven years and will involve approximately 1,800 sorties. These trials are necessary to validate the aircraft's stealth features, avionics, sensors and weapons integration before it enters service.

As uncertainty continues over the GE deal, Indian agencies such as the Defence Research and Development Organisation (DRDO) and the Aeronautical Development Agency (ADA) are exploring other possibilities. Alternative engine partnerships are also being examined as a precautionary measure.

France's Safran and Britain's Rolls-Royce have previously shown interest in working with India on advanced fighter engine technology and development programmes. Both companies have expressed willingness to cooperate with India in the field of fighter aircraft engines.

However, officials believe that changing the engine supplier at this stage would be extremely challenging. Engine integration is one of the most critical aspects of fighter aircraft development. Any change could affect certification requirements, testing schedules and overall aircraft performance.

The AMCA airframe design is largely finalised, making major changes more difficult. As a result, the outcome of the ongoing negotiations with GE is now being viewed as a key factor that could influence the timeline and future direction of India's most ambitious indigenous combat aircraft programme.

While technical discussions have reportedly progressed, the commercial issues surrounding engine costs, manufacturing investments and technology transfer conditions remain unresolved. The final outcome of these negotiations will play an important role in determining how quickly the AMCA programme moves forward in the coming years.