Following Trump’s announcement of 50% tariffs, India halts a $3.6 billion contract to purchase Boeing aircraft: According to reports, once 50% tariffs were imposed, India put a halt to a $3.6 billion agreement to purchase Boeing aircraft from the US. The U.S. State Department authorised the initial $2.42 billion purchase of six more Boeing P-8I maritime patrol aircraft in 2021. Inflation, supply chain delays, and US President Donald Trump’s tariffs have all contributed to the price’s recent spike.
Reports from defence sources claim that a nearly 50% increase in project expenses led to the decision. Trump’s 25% tariffs, which were put in place at the beginning of August, contributed to the steep price increase by making parts and components associated with Boeing’s aircraft acquisition considerably more costly. Since then, the buyers—in this example, the Indian government—have been charged for these expenses.
The Ministry of Defence has reportedly decided to halt the purchase and carry out a strategic review as a result. The ultimate choice will probably be influenced by elements including growing expenses, shifting geopolitical conditions, and strategic autonomy. However, it is important to remember that the Indian government has not formally confirmed the agreement or its suspension.
What caused the 50% price increase?
The planes’ supply chain includes Indian exports or parts made in India that are now subject to tariffs when they are imported into the US or used in finished goods. As a result, this tax drives up Boeing’s overall costs, which it then transfers to the Indian buyer.
Air India Boeing retrofitting
The events occurred concurrently with Air India starting to ship its old Boeing 787-8 Dreamliners to the United States for modification. By year’s end, the first refurbished plane was expected to enter the fleet, according to sources who spoke to PTI. Air India operates a total of 33 Dreamliners, comprising 7 Boeing 787-9s and 26 heritage Boeing 787-8 aircraft.
A Boeing plant in the US has retrofitted the first legacy Dreamliner, and there will be a number of certification procedures. The modified aircraft is anticipated to become part of the fleet by the end of this year and will serve as the model for the others. The airline plans to send two older Dreamliners for retrofitting each month after that is finished, according to the sources.
Each of the three-class seats on this modified aircraft will consist of 20 business class, 25 premium economy, and 205 economy seats.