India has reportedly put on hold a multi-billion-dollar plan to buy Boeing aircraft from the United States, after costs surged following new US tariffs. The $3.6 billion deal was meant to secure six additional Boeing P-8I maritime patrol planes, but defence sources say the government is now reassessing the purchase.
Rising Costs Push Deal Into Uncertainty
The original agreement, cleared by the US State Department in 2021, was valued at $2.42 billion. Since then, prices have risen sharply due to inflation, supply chain disruptions, and most recently, a 25% tariff imposed by US President Donald Trump at the start of August. This levy affects Indian exports and parts used in the aircraft, making production more expensive for Boeing and, in turn, for the Indian buyer.
Defence sources say the nearly 50% jump in costs is the main reason for the pause. While the Ministry of Defence has not officially confirmed the suspension, reports suggest that changing geopolitical realities and India’s focus on strategic autonomy will influence the final decision.
Impact of US Tariffs on Defence Procurement
The tariffs have increased costs on components produced in India that are shipped to the US for assembly. These added expenses are then reflected in the final price of the planes. Industry watchers say this has made the deal less financially viable in its current form.
Air India’s Boeing Retrofit Program Moves Forward
Even as the defence deal faces uncertainty, Air India is pushing ahead with its own Boeing-related plans. The airline has started sending its older Boeing 787-8 Dreamliners to the US for retrofitting. The first upgraded aircraft is expected to rejoin the fleet by the end of this year, following certification.
Air India operates 33 Dreamliners, including 26 older 787-8s and 7 newer 787-9s. The retrofit programme will serve as a template for all legacy aircraft, with plans to send two planes each month once the first is complete.Upgrades for Passenger Comfort
The revamped jets will feature a three-class cabin layout: 20 Business Class seats, 25 Premium Economy seats, and 205 Economy seats. The move is part of Air India’s broader strategy to modernise its fleet and improve passenger experience.
