The Reliance & Rolls-Royce Proposal 

Incidentally on Pakistan’s Independence Day, i.e, 14th of August, a joint partnership was announced between Reliance Industries and Rolls-Royce proposing to develop, design and manufacture the 120kN engine for India’s indigenous Advanced Medium Combat Aircraft Program alongside agreeing to explore the establishment of an Aerospace Gas Turbine Complex in India. This is a landmark proposal because the procurement of military aero-engines has remained under the exclusive control of defence public sector undertakings such as Hindustan Aeronautics Limited (HAL), and the involvement of private companies such as Bharat Forge and Tata have been limited to the production of sub-components. With this announcement, Reliance Industries would become the first private company in India to be involved in co-developing a fighter jet engine for the Indian Air Force (IAF). 

Reportedly, India had been considering proposals for the 120kN engines from the United Kingdom and France for its AMCA Mark 2 program on similar terms. But with the announcement of Reliance as a co-developer with RR, the chances of France's Safran has been challenged. Nonetheless, deals involving jet engines are not normal military procurements for guns and ammunitions. These deals take into consideration multiple factors such as IPR, technology ownership, export freedom, depth of technology transfer, technical metrics and geopolitical trust which significantly impact the operational freedom of purchasing countries. And the impact of such deals extend to  foreign policies, corporate structures, stock markets and shift geopolitical leverage. They bind countries in a relationship for decades lasting upto half a century and outlast many governments and diplomatic fallouts. 

The AMCA Program and its Importance for India

The AMCA program is crucial for India’s defence capabilities and for improving the country’s domestic technological capabilities. It is an indigenous program to manufacture 5th generation fighters aircrafts. It has been divided into two phases - AMCA Mark 1 & AMCA Mark 2. Mark 1 phase serves as the initial steeping stone to fly the 5th generation aircraft and uses the US GE F414 engine (98kN thrust) for its initial two squadrons, for which a MoU was signed with GE during PM Modi's visit to the USA in 2023. Whereas, the Mark 2 phase is for the remaining five squadrons and will use a co-developed 120kN engine which is proposed by Rolls-Royce & Reliance and France's Safran. The technology will be a massive upgrade from  the current 4.5th generation Rafale and Tejas Jets, with high-end stealth technology, advanced radars, internal weapons bay  and integration of artificial intelligence. 

The AMCA is imperative to counter evolving regional threats and arrest the Indian Air Force's declining fighter squadron strength. It will act as a catalyst for India's aerospace industry, leading the shift away from off-the-shelf purchases and foreign dependence to indigenous IP and private sector manufacturing. 

In the geopolitical context, it becomes even more important to fly a 5th generation fighter aircraft as early as possible. China has installed advanced sensor networks and long range missiles in its airfields in Tibet and is reportedly testing 6th generation technology. Moreover, Pakistan has expressed its intent to procure the J-35, the 5th generation fighter jet built by China. Now, if Pakistan inducts a 5th generation stealth aircraft before India, the qualitative edge of India would be weakened. Moreover, the hostility of India's neighbours coupled with the dependence of Pakistan on Chinese military platforms and equipment, poses a two-front threat to India at its northern and western borders. 

The Cost of Dependence on USA: ITAR, CAATSA Leverage, and Past Betrayals

The deal for 99 GE F404 engines for the Tejas fighter aircrafts (4.5 generation) was signed in 2021 requiring the delivery of 16 to 20 engines annually, starting from 2023, in order to meet the target of building 83 Tejas MK1A jets by 2029. However, the first engine was handed over in March 2025, i.e, after a two year delay, and only a total of six engines have been delivered to HAL by early 2026. Such delays, irrespective of the reasons, are against the interests of India’s defence policy and readiness. Because of this, the IAF is operating at a strength of 29 squadrons against the total sanctioned strength of 42 squadrons.

Inspite of the delay, the MoU of procuring GE F414 engines for the AMCA Mark 1 program was signed by PM Modi during his visit to the USA in 2023. As per the MoU, only 80% of the technology will be transferred and the remaining 20%, which entails single-crystal turbine blade casting metallurgy, thermal barrier coatings, and FADEC source code, will not be shared with India. Moreover, the cost of each GE F414 was reportedly surged threefold from initial commercial talks - from approximately INR 80 crores per unit to INR 200 crores per unit. In addition, GE has sought $800 million or INR 6,000 crores to set up a manufacturing facility in India. However, a final agreement has not yet been signed and has been reportedly stalled post the terms mentioned in the MoU. 

The International Traffic in Arms Regulations (ITAR) is another impediment in importing defence equipment from the USA. ITAR is a strict set of rules that controls the export and import of defence technology, ensuring the paramountcy of US National Security. Under these rules, the US Government prevents the transfer of core technology and its IPR to other countries. For instance, in the MoU for GE F414 engines, the US excluded the sharing of critical technology and agreed to only 80% transfer of technology. Effectively, it means that India will be able to only assemble the engine locally but never be capable of designing or modifying the core technology as per its requirements. 

Secondly, India would require the permission of the US State Department and the US Congress, viz., the legislative and executive bodies of USA, to make independent changes to the core technology of the engine. This prevents India from integrating its own indigenous weapons into the aircrafts, making software patches or even tweaking the technology as per its operational requirements. 

Thirdly, the ITAR license granted to countries can be suspended or revoked anytime by the USA. Incase there is a shift in foreign policy or diplomatic friction, the country could lose its license. And once the ITAR license is revoked or frozen, the spare parts, technical support and necessary updates would not be accessible to that country. Basically, it handicaps the country’s defence capabilities. Hypothetically, if India is involved in a war which is against the interests of the US, it can revoke the ITAR license and handicap part of the IAF’s capabilities operating as a  ‘Soft Kill Switch’. 

Fourth, the ITAR prevents countries who have manufactured defence equipment using parts of the U.S from exporting it to third-party countries without a prior written approval - effectively placing the control of India's defence export choices with Washington. Fifth, the ITAR regulations includes the concept of ‘FADEC Source Code Lockout’ which requires GE engines to run on fully encrypted FADEC software, preventing Indian engineers  from modifying engine parameters or checking backdoor surveillance - which would require an unencrypted source code that will not be shared per the ITAR. Lastly, the regulations mandate end user monitoring. Meaning that US military inspectors have the legal right to physically inspect weapon deployments and airbase facilities, which violate India’s operational sovereignty and defence confidentiality. 

Beyond export regulations like ITAR, the Countering America's Adversaries Through Sanctions Act (CAATSA) introduces a broader geopolitical dilemma into U.S defence imports. It is a 2017 US Federal Law that imposes mandatory sanctions on any nation engaging in transactions with Russia. However, India has been provided a waiver under the CAATSA despite purchasing S-400 and other defence equipments from Russia. Why? Because the U.S knows the high requirements of India and banning them under the CAATSA would exclude a prospective buyer, so it is better to allow them to purchase from Russia while using the CAATSA as a persuasive tool to eventually shift New Delhi towards Washington. This is how domestic legislations are leveraged for foreign policy objectives and defence lobby demands. It is similar to how the threats of imposing tariffs were used to prevent India from buying Russian oil and to halt Operation Sindoor. Moreover, sanctioning India under CAATSA would collapse the Quad, destroy US - India defence convergence, and push New Delhi back towards Russia. Therefore, by keeping the threat of sanctions or tariffs active, Washington retains permanent geopolitical leverage, using it to gradually squeeze Russian equipment out of India's long-term procurement policy. 

The integrated strategy of delaying deliveries, complex domestic regulations on defence exports, and threats of imposing sanctions bestows the control of the development of IAF’s capabilities and growth of India’s defence technology with the USA. This reflects the daunting problem of importing from the U.S and the general disadvantage of relying on foreign countries for critical defence supplies. 

Beyond these supply chain bottlenecks, India has faced acute unreliability from the U.S during past conflicts with Pakistan. Washington has imposed defence embargoes and restricted critical technological access. For instance, in the 1999 Kargil War, the US meddled with the GPS devices so that the IAF can never trace the right co-ordinates, preventing precision strikes on Pakistani soldiers inside Indian territory. In 1971, when India was supporting the liberation of East Pakistan, the USA sent a nuclear powered aircraft carrier, the ‘USS Enterprise’, in the Bay of Bengal to support Pakistan. Moreover, Pakistan has continued to use US defence equipment in almost all wars against India. In the 1965 war, Pakistan used M47 and M48 tanks with F-86 fighter aircrafts. In the 1971 war, it used PNS Ghazi which is a US leased submarine. And during the 2019 Balakot strikes and the counter-attack after Operation Sindoor, Pakistan deployed American F-16 fighter aircrafts against India. This creates a double loss for New Delhi - while U.S regulations limit India's usage and export rights, the same regulations fail to prevent American weapons from being deployed against India. 

Evolution of Engine Terms: From GE to Rolls-Royce

The importance of sovereign control over its own hardware is imperative for India. While the GE Aerospace MoU offered only 80% technology transfer and excluded the core technology such as single-crystal turbine blade metallurgy, thermal barrier coatings, and thermodynamic design algorithms; RR-Reliance proposed 100% transfer of technology and joint IP ownership. This will equip the Indian engineers to better understand the technology and enable them to upgrade, modify or scale the engine independently without any restrictions. Moreover, RR would hand over complete FADEC source code and would not require End User Monitoring, guaranteeing operational security and defence confidentiality to the IAF. 

RR is also a global leader in manufacturing marine gas turbine propulsion systems. This would mean that the engine core being developed for the 120kN AMCA could be converted or 'marinized' into naval gas turbines to power destroyers, frigates and aircraft carriers. This would act as a force multiplier and benefit the Indian Navy as well. 

On one hand, the GE proposal was merely an agreement allowing HAL to import and assemble kits under a license from the U.S. However, the RR initiative anchors a strategic partnership with Reliance Industries alongside DRDO/GTRE to build a dedicated Aerospace Gas Turbine Complex in India. 

Crucially, this framework is not without its legal fine print. While India secures 100% ownership of newly generated Foreground IP, the foundational IP, i.e, decades of baseline metallurgy and aero-thermal engineering, remains under British ownership, though India holds unhindered usage and modification rights, unlike the MoU with GE. Furthermore, this proposal includes joint IP functions, which is a dual-key system, requiring mutual consent to export or commercialise the design. Furthermore, third-party exports also remain subject to Britain’s Export Control Joint Unit (ECJU), albeit far less intrusive than ITAR.

Nonetheless, this deal is a powerful integration of British design and technology with Reliance’s private capital, that paves a strong foundation for India to shift from a dependent assembler to a self-reliant manufacturer. It will prevent New Delhi from being used as a strategic leverage in the Indo-Pacific and extricate it from restrictive conditions like foreign end-use monitoring and supply chain cutoffs during wartime. 

Conclusion  

The contrast between the GE and Rolls-Royce frameworks lays bare the dichotomy faced by India under the same program. Accepting the American model means remaining locked inside a client-state relation, i.e., paying premium prices for assembly licenses, accepting digital black-boxes, being subject to US' domestic legislations over Indian defence exports and intrusive base inspections. In contrast, the joint venture between Rolls-Royce and Reliance Industries not only breaks the legacy of state-monopoly monocultures but also secures 100% Transfer of Technology, core IP ownership, unencrypted FADEC source code, and marinisation rights for the Indian Navy, shifting India from an international buyer into an independent aerospace co-creator.

Yet, technology metrics and legal terms only tell half the story. A defence transaction of this magnitude does not materialize through standard commercial negotiations alone. How did a British industrial giant join an Indian industry leader such as Reliance outmanoeuvring  French and American rivals? What role did intelligence agencies play in approving the transfer of core aerospace engineering? And how does London reconcile this strategic partnership with its past corporate shadow history in global defence procurement?

In next article, the covert architecture powering the deal will be discussed. Particularly, the 1994 UK Intelligence Services Act ("Economic Wellbeing" mandate), the relationship between MI6 and Rolls-Royce, the role of private corporate intelligence firms such as Hakluyt & Company, the SFO bribery probes into RR, and how joint intelligence vetting paved the way for India's engine sovereignty would be explored.