Plans to bolster the Indian Navy’s maritime capabilities have encountered a significant obstacle as negotiations between India and the United States for six additional Boeing P-8I surveillance aircraft have stalled. The primary cause of this deadlock is a sharp disagreement over pricing.
Reports indicate that the cost of the proposed deal has escalated by nearly 50 per cent, rising from an earlier estimate of $2.42 billion to approximately $3.6 billion. American officials have refused to lower the quoted price, attributing the steep increase to persistent difficulties within the global supply chain.
According to highly placed sources, the US delegation has conveyed that they have little room to manoeuvre regarding the cost. They maintain that price reductions are impossible given the current global manufacturing and logistical disruptions.
Additionally, recent open-source reports suggest that broader trade tensions, including new US tariffs on imports, may be complicating the financial terms of such defence agreements.
For India, the revised price tag is substantially higher than the unit cost paid during previous acquisitions, leading to a firm refusal to accept the new terms.
Despite a visit by a delegation of US government officials and Boeing representatives to India earlier in 2025 to resolve these differences, the two sides failed to reach a consensus.
The Indian Navy already operates a robust fleet of 12 P-8I aircraft, which were procured in two separate tranches.
The first contract for eight aircraft was signed in 2009, with deliveries commencing in 2012, followed by a subsequent agreement for four additional planes in 2016.
These aircraft are specialised variants of the US Navy's P-8A Poseidon, explicitly customised for India’s unique requirements.
They have become a cornerstone of the Navy’s operations, proving exceptionally capable in monitoring vast stretches of the ocean and conducting anti-submarine warfare.
To ensure they can neutralise threats, these platforms are equipped with potent weaponry, including Harpoon anti-ship missiles and lightweight torpedoes.
The operational value of the P-8I fleet has been demonstrated in critical real-world situations.
Notably, these aircraft played a vital surveillance role during the 2017 Doklam standoff along the Line of Actual Control, tracking movement and providing essential intelligence.
Initially, defence planners had considered acquiring ten additional aircraft to further strengthen this capability, but the requirement was eventually rationalised to six units, complete with a weapons package.
The delay in this acquisition is seen as a setback, particularly as the Navy seeks to maintain a persistent vigil over the Indian Ocean Region (IOR) to counter the growing presence of Chinese submarines and naval vessels.
This impasse over pricing arrives at a delicate moment for India-US defence cooperation.
The P-8I programme has historically been viewed as a major success story, marking India as Boeing’s first international customer for this advanced platform. However, resolving these cost concerns is now essential to moving the deal forward.
As regional maritime security challenges continue to mount, expanding the surveillance fleet remains a top priority for the Indian Navy.
Moving ahead, the focus will likely be on finding a middle ground that respects India’s insistence on value-for-money procurement while preserving a strategic partnership that is vital for stability in the Indo-Pacific.
