IAI nears $900 million India deal for six aerial refueling aircraft
The proposed agreement would see six Boeing 767 passenger planes converted into tankers, with at least 30% of the work carried out by Indian companies.
Israel Aerospace Industries (IAI) is nearing a major deal to supply the Indian Air Force with six aerial refueling aircraft in a transaction valued at approximately $900 million, according to reports in the Indian media.
The proposed agreement involves converting six Boeing 767 passenger aircraft into aerial tankers, with deliveries to the Indian Air Force expected by 2030. It would also require at least 30% of the conversion work to be performed in India by local companies, led by Hindustan Aeronautics Limited (HAL), using technical know-how transferred by IAI.
IAI has been the sole bidder in an Indian tender for new aerial refueling aircraft over the past year. The procurement is intended to replace the aging Russian-made tankers currently operated by the Indian Air Force. IAI's proposal to convert passenger planes into tankers offers a potentially more economical alternative: converted aircraft are estimated to cost 30% to 50% less than newly manufactured tankers.
India's interest in expanding its aerial refueling capabilities comes amid efforts to strengthen its air force in response to security challenges involving Pakistan and China.
For IAI, the emerging agreement could provide a significant measure of business certainty in a field where it has struggled to secure orders at home. The company had sought to persuade Israel's Ministry of Defense and the Israeli Air Force to acquire converted tanker aircraft, but the defense establishment instead opted to purchase KC-46 aircraft from U.S. manufacturer Boeing, using American defense aid funds.
IAI has warned that the decision to buy American aircraft could undermine its ability to maintain expertise and professional capabilities in aerial tanker conversions. A major agreement with India could therefore help preserve the company's position in the field and sustain its operations for years to come.
IAI, like other major Israeli defense contractors, has maintained close and longstanding ties with India's defense establishment. In cooperation with India's Defence Research and Development Organisation (DRDO), the company developed the Barak 8 air defense system, which has been acquired by the Indian military through a series of contracts worth billions of dollars.
In 2017, IAI signed a contract worth approximately $2 billion to supply air defense systems to India. The company has also sold LORA missiles and unmanned aerial vehicles to the country.
