Israel Aerospace Industries (IAI) is on the verge of securing a significant defense contract worth $905.7 million to convert six passenger aircraft into aerial refueling tankers for the Indian Air Force. According to Indian press reports, IAI stands as the sole bidder in the tender, making the deal nearly certain.
The Conversion Project#
Under the proposed contract, IAI will transform six used Boeing 767 aircraft into modern refueling tankers. A key requirement stipulates that 30% of services and parts must be sourced from India, aligning with the country’s “Make in India” defense initiative.
This conversion project addresses a pressing need for India’s military. The Indian Air Force currently relies on six aging Russian-made Ilyushin IL-78 tanker aircraft from the 1980s, which have become increasingly difficult to maintain and service.
Superior Capabilities#
The converted Boeing 767s will offer substantial improvements over the existing Ilyushin fleet:
| Specification | Ilyushin IL-78 | Boeing 767 (Converted) |
|---|---|---|
| Crew Required | 6 | 3 |
| Payload | 100 tonnes | 67.1 tonnes |
| Fuel Transfer Rate | 2,000 liters/min | 4,000 liters/min |
| Maximum Speed | 852 km/h | 926 km/h |
| Range | 7,223 km | 12,200 km |
While the Boeing 767 carries less fuel, its doubled transfer rate and significantly extended range make it far more effective for supporting long-range air operations.
IAI’s Conversion Expertise#
IAI has established itself as a global leader in aircraft conversions, primarily for civilian applications. In September 2025, the company announced the successful conversion of a Boeing 777 from passenger service to cargo configuration.
Aircraft typically become unsuitable for passenger transport after approximately fifteen years of service. However, conversion to cargo or specialized military use can extend their operational life by another fifty years. The economics are compelling—conversion costs run about 20% less than purchasing new purpose-built aircraft.
Strengthening Defense Ties#
This potential contract comes amid deepening India-Israel defense cooperation. Just days before this announcement, the two nations signed a comprehensive Memorandum of Understanding during the 17th annual meeting of the Joint Working Group in Tel Aviv.
The MoU establishes frameworks for collaboration across strategic dialogues, training, defense industrial initiatives, AI, and cybersecurity. India has been the largest importer of Israeli weapons from 2020-2024, according to the Stockholm International Peace Research Institute.
Other recent defense deals include India’s approval of a $3.76 billion package for MR-SAM missile systems and a $3.3 billion joint venture producing 425,000 assault rifles.
Source: Globes
