The United States and India are nearing a deal that would allow General Electric to manufacture jet-fighter engines in the country, for Indian aircraft, the Wall Street Journal reported early Wednesday. GE stock climbed modestly premarket following the news.
According to reports, the deal would allow GE to produce engines for Tejas military fighter jets. It would manufacture the aircraft engines in partnership with India's state-owned Hindustan Aeronautics and produce them at its facility in Bengaluru.
U.S. Defense Secretary Lloyd Austin and Indian Defense Minister Rajnath Singh met to discuss deal specifics in India earlier this week
A deal could be reached during Prime Minister Narendra Modi's planned visit to Washington from June 21 to 24, but would still need approval from Congress. Meanwhile, the Biden administration says it would sign off on the deal, Reuters reported last week.
An unnamed Indian official told the WSJ, "We expect this to be one of the biggest deliverables from the prime minister's U.S. visit."
Other potential topics of discussion during Modi's visit include collaborating on military, surveillance and intelligence systems.
The deal comes amid India's efforts to bolster its domestic defense industry. It aims both to deter China and to wean itself away from long-term reliance on Russian military equipment. Russia is India's largest supplier of military aircraft. And India accounted for one-third of Russian arms exports from 2018 to 2022, the WSJ reported.
GE Stock
GE stock rose about 1% premarket Wednesday following the news. General Electric shares soared more than 60% so far this year after GE stock broke out from a cup-with-handle base in late January.
You can follow Harrison Miller for more news and stock updates on Twitter @IBD_Harrison.
