ISRAEL, November 3, 2026 – Israel Aerospace Industries looks set to land one of the largest defence orders in Israeli-Indian history – reportedly worth $905.7 million and involving the modification of six Boeing 767 passenger jets to tanker aircraft for the Indian Air Force. This order hasn’t been signed yet, but according to Indian newspapers, Israel Aerospace Industries is the sole successful bidder, having passed the bidding process by the government.
If true, this order would accomplish much more than just replacing old tankers. It would strengthen an existing defence cooperation to some considerable extent.
What India is buying
India’s Indian Air Force has a fleet of six Ilyushin Il-78 tankers which are considered by New Delhi to be inadequate both in terms of capability and quantity. Past efforts to acquire new tankers failed due to their prohibitive cost and technological difficulties, and India was forced to lease aircraft as a temporary solution.
The proposed deal entails conversion of six Boeing 767s into refuelling aircraft as opposed to developing new tankers from scratch. This is important because conversion is generally quicker and possibly more economical than new production and will allow India to have a modern platform for increasing the range and endurance of its fighters, transport planes and surveillance platforms.
The price tag is estimated at $905.7 million, marginally higher than the often cited $900 million figure. The Israeli Aerospace Industries would dedicate at least 30 per cent of the project to India, in line with the Make in India drive of Prime Minister Narendra Modi.
The Indian partner
It’ll act as a local partner company, as per Indian reports that have been referenced by Globes. The IAI has been working with India previously,y as there is an Aerospace Services India based out of New Delhi, which is a subsidiary company which was founded in March 2024 along with the DRDO.
This subsidiary has around 50 people working for it and deals in transactions done in rupees. They even deal with the development of the MRSAM (Medium Range Surface-to-Air Missile) that IAI has worked on with DRDO.
Why the deal matters
For IAI, it will serve to consolidate its reputation as one of the world leaders in aircraft conversion. It was in September 2025 that the company performed the world’s first-ever Boeing 777 passenger-to-freighter conversion certified by the US Federal Aviation Administration and the Civil Aviation Authority of Israel, and just now it is converting a 777-300ERSF in Arizona.
The logic behind it for India is rather obvious. Air-to-air refueling allows short-range aircraft to extend their range and thus enable the IAF to maintain a presence in the area, react faster in such a huge geographical territory and operate farther from their base. Six converted 767s are definitely better than Il-78s, which have a crew of six people, pump fuel at the speed of 2,000 liters per minute and cover a distance of about 7,200 kilometers.
Not signed yet
Here’s the caveat: this is still a “set to win” story, but not yet a closed procurement. As per the reports, there were Russian and European bidders involved, and an official announcement from the Indian side on the deal is yet to be made. Large defence deals can be delayed because of offsets, financing, scheduling, and even political reasons.
Nevertheless, the trend is evident. The SIPRI figures mentioned by Globes reveal that India accounted for around 29 per cent of Israeli defence exports between 2021 and 2025, thus being Israel’s largest defence customer. A $905.7 million deal for tanker conversions will be one of the largest bilateral agreements, though not as large as the $1.6 billion Barak 8/MRSAM deal from 2017.
If the agreement is signed in the coming weeks, India will get a more efficient refueling aircraft, IAI will have another flagship product, and “Make in India” will become an important part of the deal.
