India Reportedly Pauses $3.6 Billion Boeing Jet Deal After US Tariff Hike: Government Denies Claims

Reports suggesting that India has paused a $3.6 billion deal to acquire Boeing P-8I maritime patrol aircraft from the United States have stirred headlines worldwide. The speculation follows U.S. President Donald Trump’s decision to raise tariffs on Indian goods to 50%, but Indian officials insist the procurement process remains on track.

Reports of a Pause in the Boeing Jet Deal

A Reuters report, citing unnamed Indian officials, claimed that New Delhi had temporarily put the deal on hold. The Boeing contract, originally valued at $2.42 billion in 2021, has seen its projected cost rise to $3.6 billion due to tariffs, global supply chain disruptions, and inflation.

The report also suggested that Defence Minister Rajnath Singh had canceled a planned visit to Washington amid rising trade tensions between the two countries.

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Government Calls Reports “False and Fabricated”

In a swift response, the Indian Defence Ministry dismissed the claims as “false and fabricated”, stating that there is no pause in the acquisition process. According to the ministry, discussions and procurement procedures for the Boeing aircraft are continuing as per the standard defense acquisition framework.

Officials emphasized that India remains committed to strengthening its defense capabilities and that bilateral defense ties with the U.S. remain important, despite the ongoing trade dispute.

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The Tariff Dispute at the Core of the Tensions

The controversy began on August 6, when President Trump announced an additional 25% tariff on Indian goods, taking the total duty rate to 50%. The move was reportedly a response to India’s continued import of Russian oil, a policy Washington has criticized.

The tariff hike has put pressure on several ongoing trade and defense negotiations, raising questions about the financial viability of high-value deals like the Boeing purchase.

Mixed Signals for India–US Defense Relations

While some analysts believe the tariff escalation could slow down major U.S. defense procurements by India, others argue that strategic defense cooperation between the two countries is too important to derail.

For now, there is no official suspension of the Boeing P-8I deal, but the cost hike and political tensions could influence the pace of negotiations.