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The State Department said in a March 12 notice to the US Congress that it would license the direct commercial sale having factored in "political, military, economic, human rights and arms control considerations."
The Indian navy was the first international customer for the P-8, a long-range maritime reconnaissance and anti-submarine warfare aircraft.
Boeing says it can operate effectively over land or water while performing anti-submarine warfare; search and rescue; maritime interdiction; and long-range intelligence, surveillance, target acquisition and reconnaissance.
India chose it over several rivals, including EADS Airbus A319, according to Flightglobal.com, an online aviation-trade publication.
Boeing has said it would deliver the first P-8I within 48 months of a contract signing, and the remaining seven by 2015. Derived from Boeing's commercial 737 airframe, it is similar to the P-8A Poseidon that Boeing is developing for the US Navy.
In January 2008, Washington and New Delhi sealed India's previous largest US arms purchase -- six Lockheed Martin Corp C-130J Super Hercules military transport planes valued at about $1 billion, including related gear, training and spares.
Boeing's P-8I contract is with the Indian Ministry of Defence. The sale includes associated support equipment, spares, training and logistical support through June 2019, the State Department said in its notice.
It said direct arms-trade "offsets" were expected to include engineering service, manufacturing and integrated logistics-support projects totalling $641.3 million.
Lockheed and Boeing, respectively the Pentagon's No. 1 and No. 2 suppliers by sales, are among warplane makers vying to sell India 126 new multi-role fighters in a deal that could be worth more than $10 billion.
Boeing is offering its F/A-18 E/F Super Hornet. Lockheed is pitching its F-16. They are competing with warplanes built in Russia, France, Sweden and by a European consortium.
One stumbling block for Boeing and Lockheed has been Indian qualms about standard "end-user" pacts designed to prevent leakage of sensitive US technology to third countries. Such agreements are a routine part of US government-to-government arms sale.
A similar form, known as DSP-83, had to be signed by Indian authorities for Boeing to have submitted its license request for the P-8I deal.
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Obama is making money for recession-hit US.
While Obama kicks out H1B, India gives its hard earned money to prop up the ailing American aviation industry. This is great Gandhigiri. If America stops giving its dollars, just give your hard earned dollar back to them. Now, let's get down to brasstacks. Who is getting the kickbacks?
Isn't it odd that buyers are celebrating when there's such a cash crunch? If it goes on like this, USA should thank India to turn its economy while common people in India goes to sleep hungry. Let's know who is getting the kickback.
It is a win-win. All arms supplier have their baggage - France will supply to anyone - India and Pakistan. Russia will arm-twist to extract more money and will send shoddy units. US will send quality equipments but will short-sighted and impose embargo based on flaky principle. Russia is increasingly aligning with China. So what choice do we have? With US, we have an ideal strategic partner - to counter China. Besides US and India have a lot of similarity inspite of US being an advanced country. We are both democracies, and people in both countries are innately capitalistic.
Oh what a great act of favour and kindness to India . It is only "Sale" and not gift. Other world suppliers of arms hardware are standing in que to sell their goods to India. No cause to boast about it. US is annually giving double this amount as gift to some countries.It is definitely great for Americans to get such a big order in the time of financial crisis.US should thank India for this order.