Amidst Rising US Tariff Threats, India Halts Buying Six P-8I Surveillance Aircraft, Reevaluating Other Major Defence Deals

Amidst Rising US Tariff Threats, India Halts Buying Six P-8I Surveillance Aircraft, Reevaluating Other Major Defence Deals


The Indian Ministry of Defence has put a hold on its plan to purchase six additional P-8I Poseidon maritime surveillance aircraft from the American company Boeing.

This decision comes as a direct response to new trade tariffs imposed by the United States on Indian goods and growing concerns over the deal's escalating cost, which had already risen to approximately $3.6 billion.

The move signals a significant reassessment of major defence agreements with the U.S. amidst rising trade friction. While the procurement is currently paused, sources within the ministry have indicated that it has not been permanently cancelled, leaving room for future negotiations.

Strategic Need Meets Financial Reality​

The Indian Navy has long advocated for expanding its fleet of P-8I aircraft, which are crucial for monitoring the vast Indian Ocean Region (IOR).

As the first international customer for the P-8I, India initially purchased eight aircraft in 2009 for $2.2 billion and followed with an order for four more in 2016 for over $1 billion. The current fleet of 12 is vital for tracking the increasing presence of Chinese naval vessels, including submarines, in the region.

The proposal to acquire six more aircraft was intended to bring the total fleet size to 18, enhancing surveillance capabilities.

The U.S. State Department had approved this sale in May 2021 for an estimated $2.42 billion.

However, by mid-2025, supply chain issues and other factors had caused the price to surge by nearly 50% to $3.6 billion, placing significant pressure on India's defence budget.

Tariffs Strain U.S.-India Defence Partnership​

The situation was intensified by the U.S. administration's recent announcement of a 25% tariff on Indian products, which took effect on August 7, 2025.

This move, part of a broader "America First" trade policy, was seen as an attempt to pressure India into increasing its purchases of American military hardware.

Indian officials expressed their disappointment, stating that the nation's defence procurement is based on strategic needs and national security assessments, not external trade pressures.

The halt of the P-8I deal is part of a wider pause on major American defence acquisitions, as India increasingly focuses on its "Make in India" initiative to promote domestic manufacturing and seeks to balance its trade deficit with the U.S. through other imports.

Operational and Economic Consequences​

Putting the deal on hold presents a challenge for the Indian Navy, which depends heavily on the P-8I for maritime domain awareness.

The existing fleet has already logged over 40,000 flight hours, highlighting the high operational tempo and the need for more aircraft to maintain effective surveillance over the busy IOR.

While assets like the recently acquired MQ-9B SeaGuardian drones and MH-60R helicopters provide support, they do not offer the same long-range, anti-submarine warfare capabilities as the P-8I.

Economically, the decision reflects the strain on India's finances, already committed to other high-value projects like the purchase of Rafale M fighter jets.

For Boeing, which has a significant industrial footprint in India employing around 5,000 people, a stalled deal could impact its local ecosystem, although its maintenance and support contracts for the existing P-8I fleet remain active.

Future of the Deal Remains Uncertain​

The future of the P-8I procurement now depends on a potential easing of trade tensions and price renegotiations. The Indian government's description of the pause as "halted but not definitively suspended" suggests that dialogue continues.

India may seek a more favourable price through the U.S. Foreign Military Sales (FMS) program or explore co-production arrangements, similar to those being discussed for other military platforms.

For the time being, India is carefully balancing its immediate operational requirements against pressing economic constraints and its long-term objective of achieving self-reliance in defence production.
 
We are now entering cold calculation phase with US, that is now Suddenly clear and present danger . We need to do work with what we got as even Europe will sing same tune as USA , nothing diffrent . We need to do a lot now ,on our own .
 
Post-Phelgam, the relationship between us and the US administration has gone from good to very bad. All can see how Pakistan has been counted as an ally, given good treatment and that IMF bailout. It literally looked like a 3 billion reward for the Phelgam attack. All would have blocked such a bailout, but Trump okayed it, and none from Europe objected. Europe and the US work together; we are totally alone. Even the Russians can't be trusted, as they are now in an unclear situation themselves, so we need sense and austerity.
 
A positive step by GOI.

Indigenous conversion of Tatas built C-295 aircraft is a first option.

Embraer from Brazil, is another option to consider.

Stryker for Army has failed in trials in Himalayas. Better indigenous option is Tatas WHAP which has a better engine .

GoI sending unambiguous message. Good.

Multi-million dollars defence contracts being cancelled which will hit USA. Ops Sindoor has shown the way to fast track indigenous military contracts at warp speed .

Let Defence Forces lead the way and clearly indicate to America, their mollycoddling of Pakistan is seriously frowned upon by us all.
 
Nothing at the current moment, I even doubt about GE engines; it gets worse each day. The US just announced that it is going to charge 50% tariffs starting August 27.
 
Very nice. Not only competitive price and trade concession but co-production with MRO facility too, and making Bharat part of global supply chain/eco-system of P-8I.
 
Bravo... You don't bully around the customer with money in his pocket. Maybe this will be a push to be more self-reliant.
 
India has designed the Netra AWACS based on an Embraer aircraft, and now we are scaling it to a bigger aircraft, the Airbus A321.

Similarly, India is building its own maritime patrol aircraft based on the C295. Is it really so difficult to build an Indian equivalent of the P8I? I know it's going to take time, and it may turn out to be a bit worse than the P8I, but isn't it better in the long run?
 
More than a tariffs war, it is price escalation and fear in the Indian defence ministry and maybe the Navy that during an emergency the USA may delay timelines or spare supplies, or force India not to use it in a combat situation, so it's better to choose other available options as all navies do not use the P-8I, which may be cost-effective and viable.
 
I think with a 50% tariff, a large growing population, and few technological breakthroughs, this will clearly add a significant strain on the financial resources of the country. India will need to think hard and prioritize military hardware that is essential to meet its basic demands. Also, revenue sources for the government are further expected to dry up as AIML will replace most of the IT jobs, turning a demographic dividend into a demographic liability for the country.
 
Rolls Royce was right in offering to build civilian requirement as well. Indian thinkers are caught with this nonsense that France will help in everything.

I strongly urge to have a good deal with Britain, and put everything in writing and an international bank guarantee for sanctions and politics.
 
Those who are saying that India should stop F404, they should know the fact that Tejas MK1A's design is based on that type of engine and a sudden change in engine will again make a year of delay of Tejas MK1A for making customization accordingly.
 
Big mistake. It doesn't hurt America but Indian interests. Not even China has this capability. If we want to hurt America, ban pharma shipments to America with immediate effect, start selling ammunition and weapons to Russia, and impose a 500% digital tax on American social media companies operating in India.
 
The second tenure of Trump is very unstable, and it seems to be the worst in US history. The main concern for India will be the replacement of the F404 engine with either a Russian engine or Kaveri engine derivatives. Ultimately, it will be a lesson for India and the world about the betraying nature of America. Finally, the US is showing its colours.
 
Good step. We should wait, and bide our time. If nothing else, Trump and his lapdogs can also see these deals (P-8I, Javelin, Apaches, possibly the AMCA engine deal, maybe even the Stryker for no particular reason), and that might make the more sane among that bunch of bumbling bafoons realise what they are losing out on.
 
Poseidon is just one part of the larger defence equation. Given the strategic importance of the GE engine deal, it’s worth questioning why the Indian government hasn’t considered reviewing or even pausing commercial aircraft deals with Boeing. If the GE agreement faces hurdles or is derailed, a re-evaluation of Boeing's commercial footprint in India might well follow.
 
India doesn’t actually need these planes at all because modern day drones can be used instead. Our Reaper drones can carry out ISTAR missions and it has a much longer flight time, long range and armed with anti ship missiles, light torpedoes, standard missiles, bombs, glide bombs, HSLD bombs, PGM, LGB etc.

Most of the functions and capabilities are similar but drones have lower operating costs, low maintenance requirements, easier to train with, short training times, high availability rate and low MRO needs.

On top of that we are also going to develop around 15 C295 into a maritime patrol craft to do the exact same thing but have a shorter range and flight time than the P9I. It will also be indigenously manufactured and be cheaper to.
 

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