Israel Aerospace Industries (IAI) is set to win a $905.7 million deal to convert six passenger jets aircraft refueling aircraft for the India Air Force, the media in India reports. The Israeli company, a global leader in aircraft conversion, is the only bidder whose proposal was approved for consideration in an Indian government tender - a process that also saw participation from Russian and European firms.
Should India select the Israeli proposal, IAI will convert six Boeing 767 aircraft, with a commitment that at least 30% of the work be performed in India. According to previous reports in India, the local partner for this agreement will be Hindustan Aeronautics Limited (HAL).
IAI has gained major experience operating in India, as part of Indian Prime Minister Narendra Modi’s "Make in India" program. In March 2024, IAI launched an Indian subsidiary in New Delhi: Aerospace Services India (ASI). The company was founded as part of a collaboration between IAI and the Defence Research and Development Organization (DRDO) - the Indian government’s defense R&D agency (analogous to Israel’s MAFAT and SIBAT). ASI has 50 employees, and while its headquarters is in New Delhi, the company has set up branches across the subcontinent.
ASI conducts transactions in the Indian currency, the rupee, and is the sole entity involved with the Medium Range Surface-to-Air Missile (MRSAM) defense system. This is an advanced system that provides protection against a variety of aerial threats and is in use by India’s army, air force, and Navy. The system comprises a phased-array radar, a command-and-control system, mobile launchers, and interceptors. The MRSAM system was developed through a collaboration between IAI and the DRDO for India’s Ministry of Defense.
Top of the export list
India views this agreement as a strategic deal; the Indian Air Force currently relies on six Ilyushin Il-78 tanker aircraft, which fail to meet its needs in terms of both quality and quantity. In recent years, India attempted to procure new tanker aircraft but encountered delays due to costs and technical challenges, leading them to explore the option of converting existing aircraft. For the time being, India has found an interim solution: leasing tanker aircraft.
In any case, there are significant differences between the Ilyushin Il-78 and the Boeing 767. The Russian aircraft is 47 meters long with a wingspan of 51 meters and carries a crew of six. It has a payload capacity of 100 tons and a fuel transfer rate of 2,000 liters per minute. Its maximum speed is about 850 kilometers per hour, with a range of about 7,200 kilometers. The new agreement will be one of the largest ever signed between Israel and India. The largest deal to date was the sale of Barak 8 (MRSAM) systems to India in April 2017, worth about $1.6 billion. About a month later, the naval version of the Barak 8 missiles was sold to India for an additional $630 million.
Over the past few years, India has become the biggest customer for Israel’s defense industry. Data from the Stockholm International Peace Research Institute (SIPRI) shows that about 29% of Israeli defense exports between 2021 and 2025 went to India. India has maintained the top spot, even following the massive deal to sell the Arrow 3 system to Germany for $3.5 billion, which gave Germany a 21% share of Israel’s defense exports.
IAI is a global leader in aircraft conversion, mainly for the civilian market, converting passenger aircraft into cargo planes. In September 2025, Israel Aerospace Industries (IAI) announced the successful completion of a Boeing 777 passenger-to-freighter conversion. IAI became the first entity globally to receive a Supplemental Type Certificate (STC), the authorization required to convert a passenger aircraft into a freighter, from both the US Federal Aviation Administration (FAA) and the Civil Aviation Authority of Israel (CAAI).
About a week ago, IAI announced that, in collaboration with Ascent Aviation Services and World Star Aviation, it had commenced the conversion of the first Boeing 777-300ERSF from a passenger configuration to a freighter configuration at a facility in Arizona, USA.
In this partnership, IAI leads the conversion program and is responsible for the engineering solution, technology, and conversion processes. Ascent Aviation Services provides the infrastructure and operational capabilities required to carry out the conversions at the Arizona site. World Star Aviation, which specializes in the global leasing of aircraft and engines, is responsible for coordinating activities related to the conversion of the first aircraft to arrive at the site, working in conjunction with IAI.
Published by Globes, Israel business news - en.globes.co.il - on November 1, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.