Israel Aerospace Industries Nears $906 Million Deal for Indian Air Force Tankers
Translated & summarized from Globes by baba
Israel Aerospace Industries (IAI) is close to finalizing a deal worth approximately $906 million to convert six Boeing 767 passenger jets into aerial refueling tankers for the Indian Air Force. The company's bid was the sole approved candidate in the tender, which also included Russian and European firms. This conversion project, which will see at least 30% of the work done in India, highlights IAI's expertise in aircraft modification and strengthens its position as a key defense supplier to India.
The story in 5 lines · by baba
- Israel Aerospace Industries is nearing a $906 million deal to convert six aircraft into tankers for India.
- IAI's proposal was the only one approved in the Indian Air Force's tender for aerial refueling tankers.
- The contract involves converting Boeing 767s, with at least 30% of the work to be performed in India.
- This deal would be one of the largest defense contracts ever signed between Israel and India.
- India is a major customer for Israeli defense exports, accounting for 29% of sales between 2021-2025.
Israel Aerospace Industries (IAI) is on the verge of securing a significant contract worth approximately $905.7 million to convert six passenger aircraft into aerial refueling tankers for the Indian Air Force. According to reports from Indian media and defense outlets, IAI's proposal was the only one approved as a candidate in the tender held in New Delhi, which also saw participation from Russian and European companies. If the deal is finalized, IAI will convert six Boeing 767 aircraft, with a commitment to perform at least 30% of the work in India. The Indian partner is expected to be Hindustan Aeronautics Limited (HAL).
IAI has extensive experience operating in India, aligning with Prime Minister Narendra Modi's 'Make in India' initiative. In March 2024, IAI launched a subsidiary in New Delhi, Aerospace Services India (ASI), as part of a collaboration with DRDO, India's defense research and development organization. ASI, which employs 50 Indian nationals, operates in New Delhi and has branches across the subcontinent, handling transactions in Indian Rupees. The company is also involved with the Medium Range Surface-to-Air Missile (MRSAM) system, a joint development with DRDO used by India's army, air force, and navy.
The Indian Air Force currently relies on six Ilyushin Il-78-II tankers, which are considered insufficient in both quality and quantity. Previous attempts to acquire new tankers faced delays due to cost and technical issues, leading India to consider aircraft conversion. The Boeing 767 offers significant advantages over the Russian Il-78-II in terms of size, crew requirements, carrying capacity, refueling rate, speed, and range.
This potential agreement could become one of the largest ever between Israel and India. The previous largest deal was the sale of Barak 8 (MRSAM) systems to India in April 2017 for about $1.6 billion. In recent years, New Delhi has become a primary customer for Israeli defense industries, accounting for approximately 29% of Israel's defense exports between 2021-2025, according to the Stockholm International Peace Research Institute (SIPRI). This positions India ahead of Germany, which accounts for about 21% of exports following a deal for the Arrow 3 system.
IAI is a global leader in aircraft conversion, typically converting passenger planes into freighters. Notably, in September 2025, IAI became the first in the world to receive STC (Special Type Certificate) from the FAA and the Israeli Civil Aviation Authority for converting a Boeing 777 from passenger to freighter configuration. Recently, IAI announced the commencement of the conversion of a first Boeing 777-300ERSF into a freighter in Arizona, USA, in collaboration with Ascent Aviation Services and World Star Aviation.