After weeks of turmoil, there finally seems to be some movement in the otherwise strained India-US relationship. According to a Bloomberg report, a team from the US Defense Department and Boeing Co. are likely to visit India next week to negotiate a $4 billion deal for surveillance aircraft. The talks will be centered reportedly on the purchase of six P-8I naval patrol planes.
This comes as Union Minister of Commerce and Industry Piyush Goyal on Thursday said the discussions on India-US trade deal are underway “in a very good environment” and the first tranche of the same is expected to be finalised by November this year.
The proposed procurement, first cleared in 2019, had been on hold for years. India already operates a fleet of 12 P-8Is, eight acquired in 2009 under a $2.2 billion contract and four more delivered a decade later, the Bloomberg report stated. The aircraft are deployed extensively to monitor the Indian Ocean and key maritime chokepoints.
Thaw in India-US relations?
The relationship between New Delhi and Washington hit a new low last month. US President Donald Trump announced a 25% tariff on all Indian goods and an additional 25% punitive tariff on India for doing business with Russia. The former 25% came into effect on August 7 while the latter came into effect on August 27.
A lot has happened since then — from PM Narendra Modi’s China visit for SCO, his pictures of meeting with Xi Jinping and Vladimir Putin going viral to India’s stern stance towards the new tariffs. The upcoming visit, however, shows how defense ties remain a cornerstone of the relationship even as trade tensions flare.
President Trump on Tuesday announced that the US would resume trade talks with India and that he expected to speak with PM Modi in the coming weeks. Responding to Trump, Modi said last week that he “deeply appreciates and fully reciprocates” the US President’s sentiments and “positive assessment of India-US ties”.
What is the significance of P-8I deal?
For the US, the P-8I sale would help trim its trade deficit with India, the report further stated. For New Delhi, the acquisition signals a deeper shift away from reliance on Russian arms. Bloomberg quoted the Stockholm International Peace Research Institute and reported that Russia now accounts for just 36% of India’s weapons imports last year, down from 76% in 2009.
India has increasingly looked westward to diversify its arsenal. Since 2018, it has signed defense contracts with the US worth nearly $20 billion, according to the Congressional Research Service. Last October, New Delhi cleared a $3 billion purchase of 31 long-range drones from General Atomics, the report said.
