Amid Trump Tariffs, India Pauses $3.6 Billion P-81 Deal with US

In what appears to be a tit-for-tat move, India has put on hold the procurement of six additional Boeing P-81 maritime patrol aircraft from the United States, following President Donald Trump’s imposition of steep tariffs.

The reassessment was prompted by a 50% surge in the deal’s cost, and Trump’s decision to levy an additional 25% tariff on all Indian imports—on top of a previously announced 25%. The $3.6 billion acquisition has now been paused as part of a broader review of high-value defence purchases, amid rising costs, shifting geopolitical dynamics, and a renewed emphasis on strategic autonomy.

Sources indicate that the Ministry of Defence (MoD) was prepared to proceed with the purchase despite the price hike, but the US tariff announcement altered that calculus. Officials stress the deal has not been cancelled, only placed under review in light of the changed cost structure and broader policy considerations.

In 2009, India had signed a deal to acquire eight P-81 aircraft for $2.2 billion. A follow-on order for four more was placed in 2016 for over $1 billion, as the Navy pushed for a fleet of 18 to ensure comprehensive surveillance of the Indian Ocean Region (IOR) amid growing Chinese naval activity—often involving submarines and survey or anti-piracy vessels operating under ambiguous missions.

In May 2021, the US State Department cleared the sale of six additional aircraft at an estimated cost of $2.42 billion. By July 2025, the figure had ballooned to roughly $3.6 billion due to supply chain disruptions and other global factors. The Trump administration’s 25% tariffs, framed under its “America First” policy, have further strained defence trade relations between the two countries.

Indian officials have raised concerns over the suspension of the deal, with the Ministry of External Affairs underlining that India’s defence procurement decisions are rooted in national security imperatives and strategic assessments.

Meanwhile, the suspension could also dent Boeing’s footprint in India, where it employs around 5,000 people and contributes an estimated $1.7 billion to the economy.

Currently, India has a dozen P8Is. The P stands for Poseidon. The aircraft are crucial for India’s defence as they are used for maritime surveillance, anti-submarine warfare and even disaster relief.