NEW DELHI: India has reportedly put on hold a $3.6 billion deal to purchase Boeing P-8I maritime patrol aircraft from the US, after costs surged nearly 50 per cent in the wake of new American tariffs.
The original plan – for six additional P-8Is – had been cleared by the US State Department in 2021 for $2.42 billion. Since then, the price has climbed sharply due to supply chain disruptions, global inflation, and, most recently, the 50 per cent tariffs announced by US President Donald Trump on Indian imports.
Why price rise for India
Although the aircraft are built in the US, many parts and components used in Boeing’s production come from India or are manufactured using Indian materials.
Under the new tariff regime, these Indian-made parts are now more expensive for Boeing to import into the US. This raises Boeing’s overall manufacturing cost, which is then passed on to buyers — in this case, the Indian government. Effectively, India ends up paying more for its own components when they return embedded in a finished aircraft.
According to defence sources quoted in media reports, C, given the steep rise in costs and evolving geopolitical considerations. There is no official confirmation yet from the Indian government regarding the suspension.
Air India’s Boeing retrofits continue
Separately, Air India has begun sending its legacy Boeing 787-8 Dreamliners for cabin retrofits in the US. The first refurbished aircraft – which will set the standard for the rest – is expected to rejoin the fleet by year-end.
The airline operates 33 Dreamliners, including 26 older 787-8s and seven newer 787-9s. Once the first retrofit is complete, Air India plans to send two aircraft a month for upgrades.
The refurbished jets will feature a three-class configuration with 20 Business Class seats, 25 Premium Economy seats, and 205 Economy seats.
