The Indian Air Force (IAF) is likely to finalise a Rs 80 billion deal for the purchase of six aerial refuelling aircraft from Israel Aircraft Industries (IAI), a government-owned firm that has emerged as the sole qualifying bidder.

If awarded the contract, IAI will convert six pre-owned Boeing 767 commercial aircraft into mid-air refuelling tankers before supplying them to the IAF, according to defence sources.

The Israeli company has committed to ensuring around 30 per cent Made-in-India content through offset obligations under the agreement. The tender, which began several years ago, initially saw participation from Russian and European firms, but IAI remained the only contender meeting all requirements, including the clause mandating 3–30 per cent indigenous content for second-hand aircraft.

The IAF currently operates a fleet of six Russian-origin Il-78 tankers, based in Agra, which support refuelling operations for various fighter aircraft of the Air Force and Navy.

Over the past 15 years, the IAF has made multiple unsuccessful attempts to procure additional tankers due to procurement hurdles and budgetary constraints. Although it recently wet-leased a tanker aircraft, the force continues to face a shortfall as it transitions to newer fleets capable of extended missions through mid-air refuelling.