Israel Aerospace Industries Nears $905 Million Deal With India for Refueling Jets

Israel Aerospace Industries (IAI) is on the verge of one of the largest defense deals between Israel and India in recent years. Indian media and international defense outlets report that the Indian Air Force is close to finalizing an agreement worth approximately $905.7 million to convert six Boeing 767 passenger jets into aerial refueling tankers.

The deal, which has been under discussion for over a year, is nearing its final stages. IAI emerged as the sole qualified bidder after competing with companies from Russia and Europe. The decision to advance the Israeli proposal came after evaluating various alternatives, and negotiations are now underway for the agreement's signing.

Under the project, IAI will convert the six Boeing 767s from passenger configuration to refueling tankers. A key condition set by India is that at least 30% of the conversion work will be performed domestically by local companies. IAI has agreed to this requirement, with Indian firm HAL previously mentioned as a potential partner.

The selection of IAI's bid stems from India's need to upgrade its air force's aerial refueling capabilities. Currently, India operates six Russian-made Ilyushin 78-II refueling tankers, which reportedly no longer meet the air force's needs in terms of capacity and fleet size. India has previously attempted to acquire new refueling aircraft, but faced technical and cost challenges, resorting to leasing tankers as an interim solution.

IAI's proposal is reportedly more than 20% cheaper in acquisition and operational costs compared to new aircraft offered by competitors like Airbus, and is expected to allow for faster delivery. India also stipulated that the selected aircraft be relatively new, under 10 years old, to allow for dual use in transport missions. The converted Boeing 767s will offer improved performance over the current Russian aircraft, boasting a longer operational range (approximately 12,000 km versus 7,200 km) and a faster fuel transfer rate (4,000 liters per minute versus 2,000 liters per minute). The Boeing 767 requires a smaller crew (2 pilots and a refueling operator) compared to the Ilyushin's six-person crew, although the Ilyushin has a higher payload capacity.

This deal aligns with IAI's expanding operations in the Indian market. In March 2024, IAI established a local subsidiary, Aerospace Services India (ASI), in collaboration with India's Defence Research and Development Organisation (DRDO). ASI is involved in the MRSAM air defense system, a joint project between IAI and DRDO used by India's military branches. This collaboration supports India's 'Make in India' policy, promoted by Prime Minister Narendra Modi.

According to Indian reports, the agreement also includes the transfer of technical knowledge for independent maintenance of the aircraft. If finalized, the delivery of the converted aircraft is expected between 2028 and 2030, enhancing the Indian Air Force's capabilities for long-range refueling, transport, and aerial operations, crucial given India's vast size and ongoing security challenges with Pakistan and China.