Air India-Boeing Deal Will Bolster India-US Bilateral Commercial Partnership, Say American Business Groups

Boeing and Air India announced a mega deal on Tuesday under which the Tata Group-owned airline will purchase 190 B737 MAX, 20 B787, and 10 B777X for a total of 220 firm orders valued at USD 34 billion at list price.

The deal will also include customer options for an additional 50 Boeing 737 MAX and 20 Boeing 787, totalling 290 aircraft for a total of USD 45.9 billion at the list price.“This is one of the largest purchases in commercial aviation history and a testimony to the strength of the US-India commercial partnership,” Mukesh Aghi, president of the US-India Strategic Partnership Forum said. US President Joe Biden’s statement acknowledges the strength of the commercial relationship as he called it a “historic agreement” between the two companies, he said, adding this also blends in with his State of the Union speech, where he wanted to bring back manufacturing to America.  

“As the world’s largest aircraft order in history, this is a true milestone in India’s rapidly expanding commercial aviation sector and signifies the strengthening trade and investment ties between the US and India,” said Atul Keshap, president of the US India Business Council. While discussing the landmark deal with Prime Minister Modi, Biden said he was looking forward to deepening the ties between India and the US. This purchase will support over one million American jobs across 44 states, and many will not require a four-year college degree, Biden said in the call. The Air India order is Boeing's third biggest sale ever in dollar value and second in terms of the number of planes.

“USIBC is delighted by news of Tata Group subsidiary Air India’s historic acquisition of Boeing aircraft and GE Aerospace engines. All three firms are proud members of the US-India Business Council’s Global Board of Directors, and we rejoice in this landmark announcement,” he said. Keshap said this deal showcases the mutually beneficial nature of the US-India trade partnership, asserting that he expects to see extremely positive spillover effects across the two economies.

“As Biden stated, this deal will create 1 million jobs across the United States, directly contributing to American efforts to promote inclusive growth and create high-quality manufacturing jobs at home,” he said. With Boeing as a major customer of components from an array of Indian manufacturers, the deal will simultaneously accelerate the development of India’s indigenous manufacturing capabilities and companies that ‘Make in India’ for the world, said the USIBC president.

By driving robust job creation in high-value manufacturing, this deal will contribute to the dissemination of skilling and technical know-how not only in the aerospace sector but across the Indian economy, supercharging innovation and productivity among several important sectors, Keshap said. USIBC sees this as directly servicing the US and India’s shared ambitions as members of the Indo-Pacific Economic Framework for Prosperity, where both countries are working to build resilient supply chains and expand manufacturing capabilities among high-trust partners, he added.