Indian Navy’s New P-8I Aircraft Will Have Offset Obligation Worth 30% of the Sale Value

Indian Navy

New Delhi: Boeing has confirmed that its anticipated sale of additional Boeing P-8I Neptune maritime multi-mission aircraft (MMA) to India will be accompanied by an offset obligation worth 30 percent of the value of the sale.

The P-8I sale was announced by the US Defence Security Cooperation Agency (DSCA) in late April. The deal, which has been approved by the US State Department and will proceed through the US government’s Foreign Military Sale (FMS) mechanism, covers six aircraft, equipment, spares, and support for an estimated US$ 2.42 billion.

In comments to Janes, Boeing indicated that the new P-8I offset obligation, which could be worth up to about US$ 730 million, will comprise direct and indirect offset activity in line with previous Indian government offset requirements. The offset deal is thought to be linked to India’s original P-8I contract in 2009 when it procured eight aircraft through the Direct Commercial Sale (DCS) route.

India’s pending new order of P-8Is will expand the Indian Navy’s total fleet of the type to 18 aircraft.

A Boeing spokesperson said, “The offset requirement for India is 30 percent of the cost of acquisition and its fulfilment can be through various avenues (direct or indirect offsets) as outlined in India’s defence offset guidelines.”

The spokesperson added, “While we cannot comment on the specifics of offset proposals and programmes, Boeing is committed to delivering offset projects that are in line with India’s Defence Procurement Procedure and meet the Indian government’s stated goals, including strengthening India’s aerospace capabilities.”