India has reportedly placed a hold on a 3.6 billion USD agreement to acquire Boeing aircraft from the United States, following a dramatic price escalation attributed to newly imposed tariffs.
The original contract, approved by the US State Department in 2021, involved the purchase of six additional Boeing P-8I maritime patrol aircraft.
However, the total projected cost has surged by nearly 50 per cent, reportedly due to supply chain disruptions, inflation, and the imposition of tariffs under the administration of former US President Donald Trump.
Defence sources cited in multiple reports indicate that the Indian Ministry of Defence has opted to pause the acquisition and conduct a strategic reassessment.
The cost increase, notably impacted by a 25 per cent tariff imposed earlier this August, has significantly raised the price of aircraft components—many of which are sourced from or incorporate Indian exports. These increased production costs have been passed on by Boeing to the Indian government.
The Ministry is now expected to weigh the financial implications alongside broader strategic considerations, including geopolitical developments and India’s emphasis on strategic autonomy.
It is important to note, however, that no official confirmation regarding the deal or its suspension has been issued by the Indian government.
Meanwhile, in a separate development, Air India has begun retrofitting its fleet of Boeing 787-8 Dreamliners in the United States.
The airline, which operates a total of 33 Dreamliners—including 26 Boeing 787-8s and 7 Boeing 787-9s—has sent its first legacy 787-8 for refurbishment at a Boeing facility.
The upgraded aircraft, which will serve as the model for the remaining fleet, is expected to return to service by the end of the year following mandatory certifications. Air India plans to retrofit two aircraft per month thereafter.
The revamped planes will feature a three-class configuration: 20 Business Class seats, 25 Premium Economy seats, and 205 Economy seats.