India has recently invoked penalty clauses against General Electric (GE) due to significant delays in the delivery of F404 engines for the Light Combat Aircraft (LCA) TEJAS MK-1A. These delays have pushed the expected delivery date for the engines back to March or April 2025, representing a two-year setback from the original schedule, which aimed for deliveries to start in 2023.

The contract between Hindustan Aeronautics Limited (HAL) and GE, signed in August 2021, stipulated that GE would deliver 99 GE F-404 engines for 83 TEJAS MK-1A jets. The first aircraft was initially expected to be delivered by March 31, 2024. However, issues related to supply chains have hindered GE's ability to meet these timelines. Reports indicate that GE has faced challenges with component supplies from a South Korean partner, which have contributed to these delays.

Indian government sources confirmed that penalties have been imposed on GE more than once due to these delays. Specific amounts for these penalties were not disclosed as it is considered an ongoing process.

The penalties are based on contractual obligations that allow for financial repercussions for delays in delivery schedules. This aspect of the contract is being actively enforced by the Indian government.

Despite the penalties, GE has committed to delivering two engines to facilitate the delivery of two TEJAS MK-1A jets within the current financial year. However, regular engine deliveries are still projected to resume only by early 2025.

The delays in engine supplies have serious implications for India's defence strategy, particularly as tensions with neighbouring countries like China and Pakistan persist. The IAF's authorized strength is 42 combat squadrons; however, it has dwindled to just 30 due to aging aircraft being retired without sufficient replacements. Air Chief Marshal A.P. Singh has expressed frustration over the production delays and emphasized the need for HAL to increase its output rate to mitigate the impact on operational readiness.

Despite the current setbacks, GE has committed to accelerating deliveries and addressing supply chain issues that have affected its global operations. The company is also engaged in negotiations with HAL regarding future engine procurements, including more advanced engines necessary for upcoming projects like the TEJAS MK-2 program.