India Halts Purchase of U.S. P-8I Poseidon Jets after Price Hike, Tariff Impact

India has reportedly paused the planned acquisition of six additional Boeing P-8I maritime patrol aircraft after costs surged nearly 50%, driven in part by a new 25% U.S. tariff on Indian exports, effective August 7.

As per multiple Indian reports, the Ministry of Defence (MoD) confirmed that the deal—originally approved by the U.S. State Department in 2021 for $2.42 billion—is now under review due to significant cost escalations and changing strategic priorities. The revised cost estimate reached approximately $3.6 billion by July 2025.

This decision comes amid heightened trade tensions following the announcement of new tariffs by the current U.S. administration under its “America First” economic policy. Indian officials said the tariff has forced a broader reassessment of major U.S. defense purchases, including the P-8I aircraft and other platforms.

India signed its first P-8I contract with Boeing in 2009 for eight aircraft, followed by four more in 2016. The Indian Navy has long sought a fleet of 18 to strengthen surveillance in the Indian Ocean Region (IOR), where Chinese naval activity has increased.

Meanwhile, China’s Global Times has backed India amid the ongoing tariff war with the U.S., criticizing Washington’s 50% tariffs as punishment for India’s independent foreign policy. The article claims the U.S. treats India as expendable—“not a guest at the table, but an item on the menu”—and warns that America’s push for global dominance leaves no room for neutrality.

Despite the current hold, the P-8I deal has not been canceled outright. Officials cited by Indian media suggest that pricing negotiations under the U.S. Foreign Military Sales (FMS) program could potentially revive the deal.

Boeing’s operations in India—supporting 5,000 workers and contributing $1.7 billion to the economy—may also be affected if the acquisition remains suspended. However, maintenance of the existing fleet of 12 P-8I aircraft, including servicing through Air Works in Tamil Nadu, is expected to continue.

The P-8I aircraft possesses long-range surveillance capabilities and compatibility with indigenous systems like the NASM-MR missile.