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  1. Hindustan Aeronautics shares slip over 1% after this important update; check details

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Hindustan Aeronautics shares slip over 1% after this important update; check details

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2 min read | Updated on July 30, 2024, 13:14 IST

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SUMMARY

As per a report on the Indian Defense Research Wing, General Electric (GE) has drastically reduced its engine deliveries to HAL. 

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HAL shares have jumped 151% in the past 12 months.

HAL shares have jumped 151% in the past 12 months.

Shares of Hindustan Aeronautics (HAL) slipped over 1% to ₹4,962.50 apiece on the NSE in the afternoon deals on Tuesday, July 30, after an important update regarding the company surfaced. As per a report on the Indian Defense Research Wing, General Electric (GE) has drastically reduced its engine deliveries to HAL. 

The American aerospace giant was contracted to supply 99 F404-IN20 engines for the Tejas Mk1A fighter aircraft in 2021, with deliveries scheduled to commence in late August 2023. However, recent developments indicate a substantial shortfall in the promised supply, the report added.

Instead of the anticipated 16 engines, GE is set to deliver only two F404-IN20 engines in September. This represents a shortfall of nearly 14 engines for the year, casting a shadow over the production timeline of the Tejas fighter.

The delay in engine deliveries is likely to have a cascading effect on the entire production process, potentially impacting the Indian Air Force's induction schedule for the Tejas Mk1A. The reasons behind this significant reduction in supply remain unclear, but it raises concerns about the reliability of foreign suppliers for critical defense components.

"The Indian government has yet to officially comment on the matter, but it is expected to seek clarification from GE regarding the reasons for the shortfall and the revised delivery schedule. This development underscores the need for India to accelerate its indigenous engine development programs to reduce reliance on foreign suppliers," the report added.

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