New Delhi: Tata group and General Electric Co. (GE) have signed an agreement to build a new factory in Hyderabad to make engine parts for passenger jets.

The components made here will go into the LEAP engine used in the new fuel-efficient Airbus A320neo and Boeing 737 MAX planes.

Under the strategic partnership, GE Aviation and Tata Sons’ subsidiary, Tata Advanced Systems Ltd (TASL), will manufacture, assemble, integrate and test aircraft component, said a Tata Sons statement after a meeting of the chiefs of the two groups in Mumbai on Thursday.

“We look forward to working with GE to build more expertise and strengthen India’s defence manufacturing capabilities," said N. Chandrasekaran, chairman of Tata Sons.

“Tata group’s partnership with GE will help drive synergies in defence manufacturing and focus on innovation to support our armed forces."

At its aerospace hub in Hyderabad, Tata group already builds aerostructures for Sikorsky helicopters, Pilatus trainers and the Lockheed Martin C-130 tail.

Aircraft maker Boeing Co. is in the process of shifting its Apache attack helicopter manufacturing to TASL from its current supplier Korean Aerospace in South Korea.

“Tata group is a leader in the Indian defence and aerospace sector, and we look forward to working together to meet the growing demand for LEAP engines. Our collaboration in building innovative technologies will support the ‘Make in India’ vision of the Indian government," John L. Flannery, chairman and CEO of GE said in the same statement.

The two companies also announced their “intention to jointly pursue military engine and aircraft system opportunities for the India market".

GE currently provides the jet engines and marine gas turbines for Indian military applications including the Air Force Light Combat Aircraft-Tejas Mk 1, Indian Navy P-8I aircraft, and P-17 Shivalik class frigates among others.