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General Electric's aerospace unit said on Thursday it has signed an agreement with India's state-owned Hindustan Aeronautics Ltd to make fighter jet engines for the Indian Air Force.

The development comes at a time when Indian Prime Minister Narendra Modi is on an official state visit to the United States.

The agreement includes the potential joint production of GE Aerospace's F414 engines in India and the engines will be used to power Tejas fighter jets, GE said.

Washington is working to deepen ties with the world's largest democracy and sees deeper military-to-military and technology ties with India as a key counterweight to China's dominance in the region.

Hindustan Aeronautics previously said it planned to use the engine for a second generation of light combat aircraft and it was in talks over domestic production of the engines.

Reuters reported in May the Biden administration was poised to sign off on a deal that would allow GE to produce jet engines powering Indian military aircraft.

GE first began working with Hindustan Aeronautics and the Aeronautical Development Agency in 1986 to support the development of India's light combat aircraft with F404 engines.

(Reporting by Aishwarya Nair in Bengaluru; Editing by Varun H K and Shounak Dasgupta)